Comparison with Oilexco Comparison with the debt ridden Oilexco ? There is none !
It was only as recent as 2008/9, when over enthusiastic investors drove valuations of many companies in the oil and gas sector into the realms of irrational exuberance.
The now infamous North Sea operator Oilexco, which saw the market valuation of it's 40m barrels of P2 driven up to $62/barrel, at a time when the total cost of it's P2 in production(50%+ of it's total P2 reserves) was an astounding $62 per barrel, yet even this failed to stop large institutions driving the market valuation into the stratosphere with devastating results for many when the credit ran out and the music stopped.
Today, the pendulum has swung fully: there is a major gulf between the markets and trade buyers valuation of assets, again demonstrating the irrational effect poor general market sentiment can have on valuations within sectors even with strong fundamentals.
With the current average cost to the Majors, to replace producing P2 reserves through exploration, closer to $20 than $10/barrel, IAE's takeover price for VPP is not expensive, particularly since it moves IAE into a mid cap with diversified production, that will justify a higher valuation multiple.