RE: A tale of 3 East Coast Basins Terrific information synectix...and thanks for your comments heading up your post. It's always good to receive a perspective that balances off my own. Being a long-time TAO investor who has been immensely rewarded as the share price has hit heights unimagined when I initially invested in TAO, I tend to view the future of TAO optimistically...especially from current levels, which I consider to be fire sale prices.
The East Coast Basin has always been the lottery ticket in TAO's portfolio, which does not mean it will payoff easily or quickly...if at all. The truth, as is the case with all resource exploration/development, is in the drill bit. But, before TAO/Apache can put the East Coast Basin to the drill bit test, consents still have to be obtained, and environmental concerns will have to be addressed along the way. The issue of fracking is a contentious one in many areas of the world, with much misinformation muddying the waters of truth...on both sides. However, fracking, as the article points out, is currently being conducted by Todd Energy in its Taranaki operations so, I hope, opposition to its use in the East Coast Basin will be a speed bump the overcoming of which will be more a matter of 'when' as opposed to 'if'.
The relative size of TAO, in comparison to Petrobras and ExxonMobil, means the size of the prize can be proportionately less to move the share price needle...even if the lack of 'super prospects' causes Apache to eventually abandon the jv. If, however, the initial test wells do prove the possible existence of 'super prospects', existing TAO shareholders may not have to travel the long and winding road navigating 3d surveys, environmental and infrastructure issues...Apache (or some other major) may move to take TAO out (my optimism on display, again). And, depending upon the numbers involved, the present value of a takeover bid versus the future value of production revenues may make cashing out a compelling option to many shareholders, including myself. I've been involved with TAO/TOZ/TOPLF since 2006...but that doesn't mean I am wed to this stock for the rest of my investing life.
Regardless, as danka has written in a previous post, should the shale prospects not prove out, there may still be plenty of conventional drilling targets to explore in TAO's east coast PEPs.
In any case, with its PEP holdings throughout the North Island, its success to this point (including behind-pipe production), the imminent completion of its infrastructure buildout (and corresponding stem-to-stern control of its production and delivery), lack of debt, healthy financial resources, and tight share structure...TAO is an attractive investment absent the East Coast lottery ticket. At these prices, imho, the lottery ticket comes free with purchase.
GLTA