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23/10/18
11:15
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Originally posted by jakspara
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terrier i agree in the ST, 11.5c x 0.485 = 5.5c. STX reportedly raising $13 - $15 million from inso's and a further $5 million from existing shareholders (this is not officially from the company as yet, but term sheets doing the rounds within the s708 circle).....if true, as all signs are pointing to, this represents a large dilution to STX's existing holders (myself included) and therefore will create a massive overhang to churn through.....9/10 times the SP heads back to or below the raising price. So i agree, when all is said and done a value of 5 - 5.5c is probably closer to the mark.
However.....with a longer term outlook, i don't see this as a bad deal for UIL holders as the merged entity, when considering the package of assets and management/BOD's, has the right ingredients to realise far better value for your assets than they have been previously. The near term catalyst is achieving commercial rates from the SCBGP.....STX recently stated this is achievable, however it remains to be seen whether or not commercial flow rates can actually extrapolate into being economically viable.....two very different scenarios and I'm not holding my breathe on the later, particularly in light of the recently proposed acquisition.
One (rhetorical) question i do have though is this.....why did Mitsui, CERCG and MIN all overlook the $8mill MC of UIL when involved in a $600mill+ bidding war for AWE??? With BPT and Alcoa also in the area and such a lowly MC, perhaps the reason UIL wasn't snapped up by any of these bigger players is because thier exploration geologists felt the tenements sit on the boundary or fall outside of the fairway. Therefore i believe unless we see some interest and a counter bid from any of the above mentioned over the coming weeks, we can safely assume that is their opinion of UIL's PB blocks.
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having just read up on STX was about to post something similar. Unfortunately your analysis is correct and I hate to agree. But I would not be holding my breath on that Cooper Basin project with that flare unlikely to light up your cigarette. The results look very underdone with a long way to go - will easily eat up the SPP proceeds.