VALLARES BUYOUT OF LFD!!!!Hello Everyone:
When Soros first took a large position and then a second in LFD, my eyebrows raised. Afterall Soros did not need a penny stock position, he is sitting on $ 30 billion. What could be his motivation. I do know that Soros is a trader, the play make take 1 year to 2 to play out, but there is a reason for his investment. From the recent developments from Genel over the past year, we now know that their true intention was never to drill the Chia property. What they did was sit on the land knowing it was the new oil frontier, wait for the laws to change and for MAJORS to buy them out. Genel played this perfectly and got themselves a very good bid. Longford has not drilled this property since they have the same intentions as Genel. Vallares completed the 1st wave of buying, now they are going to complete the 2nd wave of buying before they drill, which is to buyout as many partners as possible. Big guys like Rothschild, Exxon, Chevron, Sinopec don`t want to have any small fart in the way and they certainly do not like to share. Hence, negotiations are happening between LFD and Vallares (Genel) for buyout terms. LFD playing hardball as they know that Exxon, Chevron and Sinopec are interested. Given that Genel is a publicly traded company I would venture that buyout will be in terms of shares and value must be of interest for LFD to leave. I venture that a price o $ 200 million would be of sufficient interest for shareholders to approve. Soros would have tripled his money in 2 years. There is no value to a merger of VST and LFD. VST has nothing. LFD has a de-risked asset that produced 5,000 barrels of oil per day, and is estimated to have 400 million barrels of oil in place, a reasonable estimate. My hunch is that a deal will be announced in December 2011 since Vallares wants to concentrate on drilling in 2012. Remember that Vallares is stuck in a position where a NO from them means that EXXON gets the share. To the highest bidder I say.
JMHO