Tony Hayward: “We will be participating in the inevitable consolidation among the 41 companies in the Kurdish region,” he said. “We want to have the dominant position in the region by building a bigger company.”
I don't know the valuation of any potential deal but the fact that talks have been confirmed with Genel who have stated they want to be the consolidator in the region is certainly promising. It seems logical to me that they would initially target the relatively cheap Longford while LFD has little leverage and such a low valuation. I wouldn't be surprised if Genel is eventually assigned as partner with Western Zagros on the adjacent Garmain block so to increase their holding to 60% at Chia Surkh would give them a substantial combined land holding that could become a new core area for the company. This is pure speculation but if you look at the concession map I could see Genel ultimately targeting WZR and ShaMaran to gain control of 4 adjacent blocks.
I don't doubt that Genel is very interested in acquiring the LFD 40% so we'll see if mgt is capable of executing a transaction. Since mgt strength obviously isn't operational I hope they are instead able to manage this process effectively. I'm not necessarily confident of this but I own this stock for the opportunity, not the mgt, so I just hope they can close a reasonable deal and I will gladly reallocate elsewhere.
Genel has committed to Kurdistan so I suspect they may be anxious to begin their land grab prior to the potential arrival of the 'super majors' into the region. Here's hoping for a sense of urgency on their part and that LFD mgt are capable of orchestrating a favourable exit for everyone.