Arrow Exploration Takeover Rumours (AXL)

With regard to M&A opportunities - when considering Arrow's current market cap and upside self financing production and P2 reserves development potential, the best M&A opportunity in the Colombian O&G industry must surely be a takeover of Ecopetrol's share of the Tapir Block assets.

KS - I don’t think it’s a set up for a cheap takeover. Like Dave I think a fund or other such larger holder is reducing. The drop from the top is over 35%, more than PTAL and AET. It’s someone with a deadline - Edale?

Is the consensus now that we're all being set up to be screwed with a lowball takeover offer? That would be seriously disappointing given the potential here...

RA, do anyone have access to top 20 shareholders list and track an eventual takeover?

J1m1e agree with the cheap takeover idea, we are in the dark whatever. However if a takeover approach did appear expect it to be rebuffed, also there are others who would have an interest.

What for Kaos? A cheap takeover? Cause it sure is looking that way. The big boys get their cash producing assets for pennies on the dollar - what was it, a $2m drill returns $50m over the life of a well or something? Management get their millions in salary whilst developing said assets and the poor PI gets a small slice at the end with some icing. Win win for all!!

HAT you maybe quoting an article regarding the takeover of AXL shortly if the price here doesn't start following fundamentals.

Arrow is the cheapest O+G company with no debt based on a forward 1yr P/E ratio. Although it is neck and neck with PTAL. Most are in a P/E range of 5-10. AXL is 3.5, and with the rapidly growing production, its probably on a P/E of under 3. Which is crazy considering the growth trajectory and super netbacks even with oil at $70. My take is that there is a seller, and investors see the downtrend and wait for the turn before committing. While its hugely frustrating that the current SP does not reflect the progress that has been made, hopefully that will correct itself in due course. Otherwise there is likely to be a competitor who sees the cash balance, and the premium acreage and the value on offer. It would be a shame to have a takeover offer while the SP is below 50, but each day the cash balance goes up and the market cap goes down, it becomes increasingly likely. Agree about some director buying being a good shot in the arm. See JSE this morning.

Price of oil minded trader money has not gone back in to AXL because everyone knows there is an oversupply issue and Saudis if oil climbs higher could take market share lowering prices and hitting countries not obeying OPEC like Russia and other naughty countries. All this is noise though and we should concentrate on being profitable, having growth in any oil price and being a takeover target. We should be able to get 75p regardless of oil price as long as growth is aggressive enough. The recent spike provides money to help with growth plans.

Following from from those questions, I would be interested to know when (or what level of BOPD) would they contemplate a dividend in the absence of any takeover bid.

Think I topped up a little early, only couple pence though. Looking forward to the next few horizontal wells, and year end production, coupled along with a reserves upgrade after that. There should be adequate amount of data from the Obaque reservoir for some big numbers in P2 Figures which is only going to add significantly to the value of the business, and good for any future takeover offers. Onwards and upwards.

If PTAL had a serious interest in acquiring AXL, would have expected PTAL to have quietly approached and bought Canacol's near 20% shareholding (max allowed under Canadian Market Rules before triggering a Takeover Offer) that recently changed hands for 18.5p/share(since up 70%). Declaration: hold a seven figure position in both companies.