Beach is minting coin off the 'Western Flank'I mean, this is the driver of Beach Energy... annd it is damnnn near impossible to replace. Cheap, cheap oil... cheap natgas at over $5 Mcf. just flowing cash to Beach... this is a very valuable asset.. Really! Beach used the asset to leverage a few corp buyouts and grow production.... but the money just kept coming in from the Bauer Field... and then a few other fields...... Beach is now debt free, flowing cash... just so much cash.... and the production that drives this cash machine is, yes, subject to NWX which gets that 2.5%... about $10 mill... this year. What could Beach do, with too much cash coming in... to buy.... why, buy that 2.% of this cash machine and we would not pay out... $10 mill this year.... and growing!!!...
To Beach.. they save $10 mill a year..
For NWX... the shareholders are served to sell.... management is out of work though..but the two, are old, so retire... do the right thing.
If you were Beach.... what would you pay for that 2.5% of that cash machine... look thru Beach history ... it is this Western Flank that flows the cash... If, Beach paid $50 mill.... that would imply a 20% return on that investment... sweet!!! but low... plus NWX has $10 mill in cash... so Rozier can get $50 mill.... but then you work on that 20% certain return and deal UP from $50 mill.... but in the end, Rozier runs it on around a 30% ownership?? maybe less... but Beach could go hostile and then Mr Rozier will lose... the market will set the price and Beach is best buyer
and to think.... Bauer was first seen on siesmic as maybe a 100K type pool... it looked like a flat, thin section... alas, they were out by several meters at depth... Luck , big time luck to find a 40 mill barrel field that had two dozen wells into. 30 wells... now... all probably produced near 1000 bopd when flowed into sales.. such ezy cash... This is also, a superb reservoir... high perm and high porosity and all that good geo-speak stuff... EZY cash...
A very nice asset indeed... with other fields to support the decline at the Bauer Field as it just produced its 20 millionth barrel... in only 5 years... 2P extends this another 16M... just out performing in every way..
A friggin $10 million, cash flow machine for NWX. A willing buyer in Beach...A double... in share price? seems like, to me, shareholders win by selling and booking a double everyone wins... I think...