Anzon Energy Share Discussion Threads

[nickcduk] 17/6/2008 12:23

Interesting to note that AEL have agreed to sell their stake in AZA but AZA look like they haven't been consulted. Their line to shareholders is not to take any action. Not sure about rival bidders after giving it some thought. Every man and his dog has had a look at AEL over the last year or so. If they were going to make an offer they would already have done so by now.

If ROC do well in their Angolan drilling then we will get the benefit of that rise. Results are due before the deal is finalised so we might be in for an added bonus. If the well result is poor and the offer price tanks we will have a get out clause.

[ed 123] 17/6/2008 11:45

I'm inclined to think that someone else will come along. ARC's bid valued AEL at 139p per share in October 2007. The oil price then was around $80, so AZA's production (where AEL's value is) will be generating far greater profit.

AEL's management have recommended the ROC offer but privately they may be hoping this stimulates another expression of interest.

ROC up 6% now. AEL still sleeping.

[nickcduk] 17/6/2008 11:01

Risky move selling ROC and buying into AEL as a cheap way in. No guarantee the deal will go through. If it doesn't then AEL will likely fall and ROC will rally. Better to wait until the near the closing date when the chances of it completing are much higher.

[ed 123] 17/6/2008 10:55

ROC is up 5% this morning. AEL is sleeping.

[mortie1] 17/6/2008 09:51

Just sold some ROC and bought AEL, I guess the risk is that the deal doesn't go through, but looks like easy money. I would also guess that if ROC make a good discovery in Angola and the share price takes off, they may look to renegotiate the deal, but against that there is the chance of a counter bid.

[ed 123] 16/6/2008 22:30

Third time lucky for AEL holders? AEL's management seem keen to sell out to someone.

ROC closed at a mid of 92p, valuing the all paper bid for AEL at about 122p. The break fee is approximately £1.3 million against a bid value of around £140 million. There is easy room for another party to come along with a better offer for AEL. Someone with some cash to offer would be favourite. Also, ROC itself looks a bit vulnerable now.

Interesting times here, and it seems highly likely that AEL will be swallowed up eventually. My view, fwiw, ROC needs its shareprice at 100p or more to discourage a counter bid and it may need some good operational news to achieve that.

[p@] 16/6/2008 08:13

Based on ROC's closing price on 13 June 2008, this values AEL at
A$303 million (£147 million) or A$2.69 (£1.30)
per share (assuming an AUD/GBP exchange rate of 0.485).

[goodgrief] 03/6/2008 09:36

Drilling plans... Q4 2008.

Aker Solutions wins subsea equipment deals worth $12 million



OSLO (Thomson Financial) - Aker Solutions said it has been awarded two contracts for the manufacture and delivery of subsea equipment in Australia and India, worth a combined $12 million.

The Norwegian firm said the first deal is for the delivery of a four-slot production manifold to Anzon Australia's Basker Manta field development offshore Victoria, Australia, while the second is with Allseas for the delivery of pipeline anchor boxes to the KG-D6 field offshore India.

'Delivery dates for the two contracts are the fourth and third quarters of 2008 respectively,' the firm said.

[goodgrief] 30/5/2008 09:40

From today's AGM statement

"Our Company reported net profit after tax for the year of A$131,777,848 or approximately £62.7m which is a fantastic result for its first year of production derived from the activities of our subsidiary, Anzon Australia.

With a current market capitalisation of approximately £101m, this equates to a price earnings ratio of 1.61 which is significantly below that of comparable listed oil and gas companies."

[fireplace22] 08/5/2008 17:39

scsw
Dont know the mechanics of how the deal was put together but I think the $1.50 relates to AZA. The terms for AEL would be obviously based on this but pro rata in one way or another. And obviously well above where the share price is today. IMHO.

[scsw] 08/5/2008 17:13

GG

reading the above, if the offer was/might be around $1.50, doesn't that make the current share price too high ?

[cestnous] 08/5/2008 16:46

What a difference a couple of days makes.
Both articles from petroleum news.
I'm not in yet.


Article 1
Basker-6 kills off Nexus-Anzon merger

Monday, 5 May 2008
Steve Rotherham

NEXUS Energy and Anzon Australia have killed off their plan to merge after failing to agree that revised merger terms were necessary following the disappointing Basker-6 and Basker-6ST1 wells at the Basker oil field.



Basker-Manta's FPSO Crystal Ocean

The move comes after Nexus said late last month it was evaluating the impact of the two wells on oil reserves at Basker but it still believed a merger was in the interests of both companies.

In January Nexus and Anzon had announced plans for a merger, which valued Anzon at about $648 million or $1.75 per share, and comprised $0.71 in cash and $A1.04 in scrip for each Anzon share.

However in the last few weeks, media reports and industry rumour have suggested the terms of the deal would have to be substantially revised as the field was not looking as good as previously expected.

Anzon's original Basker-6 appraisal well had failed to find a southeast extension of the Basker field after intersecting its objectives about 40m low to prognosis and below the hydrocarbon-water contacts, leading to suggestions that reserves at the field might be downgraded by as much as 40%.

While the subsequent sidetrack did encounter what appeared to be a southeast extension of the field, questions still remain about the two wells' cumulative impact on reserves at the field, and the two companies have been unable to agree on this question.

Ironically, in 2006, when Anzon was seeking to acquire Nexus via a hostile takeover, Anzon's then executive chairman Steve Koroknay repeatedly emphasised the certainty of Anzon's petroleum reserves and the speculative nature and potential downside of Nexus's contingent resources.

But since then, Nexus has announced several upgrades to reserves at its Crux condensate field, while Anzon has delivered an unpleasant surprise in the form of Basker 6 and 6ST1.

Nexus said it would now focus on the ongoing development of the Longtom gas and condensate field, bringing the Crux liquids project to a final investment decision, and pursue its exploration drilling program including the upcoming Libra-1 well adjacent to Crux.

This morning, Anzon said it began production testing at Basker-6ST1 on the weekend.

"Tests were conducted individually over each of the separately isolated zones: the shallower new pool discovery sand 2872m and the field-wide intra-Latrobe sand zone," Anzon said.

"No free water was detected, only the completion brine during clean-up. Zone 2 and 7 (commingled) will be tested next. The well will then be suspended in readiness for tie-back to the Crystal Ocean production facilities in July.

"It is anticipated that given the lower than expected gas-to-oil rations that this excellent well will add significant oil rate to the facilities."

Article 2

Basker sidetrack a winner: Anzon


Wednesday, 7 May 2008

ANZON Australia may have the last laugh following its failed merger with Nexus Energy after producing more strong flows during testing of its Basker-6ST 1 well in the Basker oil field.



Crystal Ocean FPSO and Basker Spirit Shuttle Tanker

The well flowed oil at a stable rate of 4800 barrels per day during its third and final production test over zones 2 and 7, adding to flow rates of more than 8000bpd from the shallower new pool discovery sand 2872m and the field-wide intra-Latrobe sand zone.

Anzon said the production rates are higher than the joint venture expected and support the existence of a significant southeastern extension to the Basker field with field-wide reservoir sands.

The results also back Anzon chief financial officer Tony Strasser's comments in yesterday's Australian that Nexus was offering too little for Anzon in its revised takeover offer.

Strasser claimed Nexus managing director Ian Tchacos had used his company's blocking stake in Anzon to try to force the acceptance of a lower value for the company.

"Our view is that at the very least, the latest drill results put us back to where we were before Basker-6 came in under expectations," he said.

Nexus had said on Monday the merger, which originally valued Anzon at about $1.71 per share, fell apart after both companies failed to agree that revised merger terms were necessary following the disappointing results from Basker-6 and what it maintains are unfavourable results from the Basker-6ST1 sidetrack.

Strasser told the Australian that the results showed Anzon was worth at least $1.50 a share.

"Anzon is not a $1.20 a share company," he said.

Anzon's original Basker-6 appraisal well had failed to find a southeast extension of the Basker field after intersecting its objectives about 40m low to prognosis and below the hydrocarbon-water contacts, leading to suggestions that reserves at the field might be downgraded by as much as 40%.

The subsequent sidetrack did encounter what appeared to be a southeast extension of the field, and the latest results have led some analysts to suggest that a reassessment of the geology at both Basker and Manta might actually upgrade reserves at the two fields.

Nexus managing director Ian Tchacos maintains that it does not believe this is the case.

"We couldn't get a meeting of minds on value," he told the newspaper.

[goodgrief] 08/5/2008 11:11

I reckon it must be Aussie dollars, as elsewhere the article refers to US$.
But with 1 AUD equal to 0.94 USD, it pretty much amounts to the same thing.

I reckon the Anzon Australia / Anzon Energy corporate structure puts a few people off.

[scsw] 08/5/2008 09:30

GG

Thanks for mentioning this on the other BB. Looks quite interesting, is the $300k per day US or AS dollars ?

So that's about $2 million a week or $100 million a year free cash flow !! 95M shares in issue, market CAP of around 85 million.....hmmm, where's the catch ?

[goodgrief] 07/5/2008 08:01

Anzon's dry run

TWO years after it set off on the acquisition trail, Anzon Australia is back where it started, following yesterday's agreement to call off the proposed merger with Nexus Energy.

The merger was derailed after Anzon's Basker 6 well, expected to be a production well, turned out to be dry, only days before Anzon holders were due to vote on the merger proposal.

Nexus considered the failure of Basker 6 meant that reserves of Anzon's operating Basker Manty oilfield, off the Victorian coast, would be lower, possibly in the order of 30 to 40 per cent. It called in a consultant who agreed with its opinion.

Nexus still sees sense in merging with Anzon as the Basker-Manty oilfield adjoins its Longtom project, offering scope for $100 million of synergy benefits. But the reduction in reserves meant that it wasn't prepared to pay the same.

It's believed that Nexus wanted to lower the offer price by 40 per cent to around $1.10 to $1.15 a share. Anzon wouldn't agree and so the two companies have called off the deal at no cost to either party. Nexus won't declare the Basker 6 result to be a material adverse change and seek a $4 million break fee, while Anzon won't seek to compel Nexus to proceed with the original contractually agreed offer terms.

Anzon concedes that the Basker-Manty reserves will be lower, but not as much as Nexus contends -- pointing to an 8000bpd flow from the Basker 6A sidetrack well.

Moreover, oil prices have risen by around 25 per cent since the merger with Nexus was announced. So there should be little, or no, decrease in the offer price.

Anzon for some time has been seeking to expand from a one-project operation. Two years ago it bid for Nexus because, apart from the adjoining Longtom project, Nexus offered additional prospects -- in particular its Crux and Echuca Shoals fields in the Browse Basin.

The bid failed but Anzon ended up with 12.4 per cent of Nexus.

The Nexus bid confirmed another problem for Anzon. The company is 53 per cent by its British parent Anzon Energy (AEL), which hampered the Australian company's ability to fund expansion. Anzon wanted to increase the offer price for Nexus, but AEL wouldn't fund it, and was reluctant for its holding to fall below 50 per cent.

So, late last year, Anzon put itself up for sale, which resulted in a bid from ARC Energy, both for Anzon and AEL. A miffed Nexus, cut out from the process on the grounds that its indicative price was too low, responded by buying a 19.2 per cent stake in Anzon for $100 million.

The ARC Energy merger fell through and was replaced by an agreement to merge with Nexus in a scrip and cash deal which valued Anzon shares around $1.75.

Now that too has gone, leaving Anzon to ponder where to next. The company's shareholding structure, with AEL owning 53 per cent and Nexus 19.2 per cent, makes a corporate move unlikely, so if Anzon wants to expand from a one-project company it might have to look to buy assets. Its share of Basker-Manty is generating free cash flow for Anzon of $300,000 a day.

[cestnous] 06/5/2008 12:59

Markfrankie.

Thanks.

[goodgrief] 06/5/2008 10:53

Back in again. Nice solid stock.

[nickcduk] 06/5/2008 09:20

Todays test results were pretty exceptional. Once the Nexus effect wears off the market should re-rate the shares. I don't think a further offer for AEL isn't too far off. Consolidation is picking up in Oz and AEL already have production and some excellent recent test results. With oil above $120 a barrel the shares are very cheap.

[markfrankie] 06/5/2008 09:18

cestnous,just the news that merger is off,,,,people knowing that with a merger they get such-n-such £/$, now we are standing alone, ide rather have this as think we were being sold short after latest news.
?

[cestnous] 06/5/2008 09:01

Outstanding test, share price down. Been watching for a while.Can someone tell me why?

[beginnersguide] 05/5/2008 18:04

This amount is nearly as much as the whole production from
all there fields so I don't understand why such a big drop in
the SP
BG

[beginnersguide] 05/5/2008 17:48

My opinion on reading the update is that Its Anzon who have called it off due to the increased oil flow from the Basker 6 st1
well test with only the new sands and 0 zone flowing at 8047 bopd plus gas with still zones 2+7 still to be tested, or have I missed something
BG

[ed 123] 05/5/2008 15:51

It's announced in Australia that the merger is off. AZA has fallen 20% today.

It seems they couldn't agree on the impact of Basker 6.

[eddie catflap] 17/4/2008 13:24

JOA,

Have a read of this one also. This was printed PRIOR to the sidetracked well's results. It explains why the merger is in doubt.



I think the latest news just puts us back to where we were but that's just an opinion.

Can't see why you need to vote on resolutions that are not taking place. I have checked my nominee account and there are no actions with my shares although I have been buying and selling them and was out on Apr 11 which was the cut-off date.

The terms may change so how can you be expected to choose? Hmmmmm.