News: AWE to form JV for Geothermal program , page-3

Just to educate, refer to this page on the Takeovers Panel website.

http://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=panel_process/summary_of_takeover_provisions_in_australia.htm

To wit: Section 606 prohibits the acquisition of a relevant interest in voting shares if, because of that transaction, a person's voting power in the company:

- increases from under 20% to over 20% or
- increases from a starting point that is above 20% and below 90%.

So no, GRK was never on offer for just $2M; it would've been messier, of more uncertain cost and not knowing the confidential facts, quite possibly riskier than whatever arrangement has been agreed on. How committed is AWE? What provisions are there for exigent circumstances and what might those circumstances be? Is AWE completely on the hook for everything? If so, then yes I'd agree this is a foolhardy venture. But I doubt it given AWE are not partnership newbies.

Btw, the ERP funding does count to the $16.2M total. Reading between the lines, if ERP funding is *not* secured, then AWE is going to get a different treatment than just a 50% farm-in interest in just 1 GEP. The $250k payment is conditional on milestones too. This is not a walk in the park for GRK.

Finally last but not least, this venture is opportunistic for AWE - it subsidises oil exploration in the area, which AWE was intending to do anyway The MoU says nothing about GRK getting access to any found oil. But drilling for GEP just so happens to be helpful in finding said oil, hence its mention in the release.