I am now sure that the reason for the bidding war between...

I am now sure that the reason for the bidding war between Drillsearch and Magnum Hunter is because the Patchawarra Trough has more and cheaper tight and shale gas potential than deeps of the Nappamerri Trough has! (Nappamerri Trough is covered Beach-Chevron-Icon and Drillsearch-BG Group JVs)

That makes AQO (47.5% of PEL570) and PGS (20% of PEL514) main targets of takeover offers. We are now witnessing a bidding war for for AQO who owns 47.5% of PEL570 which is valued around $50m atm.

In the Patchawarra Trough (deeps only);

PEL570 is 463 sqkm - AQO's 47.5% share is 220 sqkm valued at $50m -->
That gives a $227k per sqkm for the current takeover transaction value.

PEL514 is 904 sqkm
PGS's share is 20% =180 sqkm.
180 sqkm x $227k per sqkm = $41m

$41m tenement value + $4m cash in bank = $45.
PGS has 538m shares in the market
$45m / 538m = 8.4c per share

That tells me that 8.4c share price for PGS is justifiable at the current situation of AQO bidding war. But it's currently less than 2c!

Its current market cap is $10m and has $4m cash in the bank. Plus free carried oil farmout with Senex. Its sp is very cheap atm.

The Nappamerri Trough where BPT-Chevron-Icon and DLS-BG Group JVs are exploring, is now understood well that the drilling and producing gas is going to be very hard because of the high temperatures at close to the fracking depths (around 4200m) as there is hot rock granites at the bottom of Nappamerri trough (but not in Patchawarra trough). The temperature at 5000m is around 270-300 Celsius degree there. They are coming very close to that depth when they drill and frack in the Patchawarra formation.

It is also understood well that the source of gas is mainly in the Patchwarra formation rather than REM formations both in Nappamerri Trough and Patchawarra troughs. Although he Patchawarra formation is very thick (900m) in the Nappamerri Trough, it is close to the base (bottom) of the basin.

There is only dry gas in the Nappamerri Trough while there is wet-gas in the Patchawarra Trough. The CO2 level is around 25% in Napp. Trough while it is very low in the Patch. Trough.

Therefore the Nappamerri Trough is being very hard and expensive to explore and produce. Therefore the Patchawarra trough is the only option for them to get gas.

As you know there are four LNG JVs in Gladstone; Santos-Petronas, BG Group, Origin-Conoco, Shell-PetroChina. They are in big trouble for the contracts which they have already signed for the exports of LNG from Gladstone starting from 2017 as there are problems in extracting as in QLD, and ban in NSW. So they are in deficit. The local market is going to be in big deficit as well.

A few of the JV partners of four Gladstone projects are even in bigger deficits. They are Conoco, BG Group, Shell, PetroChina and separately Chevron in deed. I think BG Group is pushing Drillsearch against Ambassador. But I am not sure how Conoco, Shell and PetroChina will fix their problems.
Origin Energy has already made a farmin agreement with Senex and farmed in to 40% of PEL514 which is around Ambassador and NSE’s PEL570. Santos has no problem with gas as they are already exploring, drilling and producing in the shallow areas of Nappamerri Trough and Patchawarra trough.

I don’t think Origin and Santos JVs and their partners are going to try to buy anything from Patchawarra Trough. However Origin’s partner in Gladstone Conoco may make a move to either NSE or PGS.