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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (103348)	6/20/2008 9:20:52 AM
From: Ed Ajootian	Read Replies (2) \| Respond to of 206093

IAE.V is indicating an open at C$3.20, so it looks like the Canadians are taking this bid seriously also. Maybe we got something here?!

To: Ed Ajootian who wrote (103348)	6/20/2008 9:34:32 AM
From: kollmhn	Respond to of 206093

Ed- I would guess this deal is stretch for END and it would trade down. Secondly, if Athena is a turkey they (END)could do an about face.

To: Ed Ajootian who wrote (103348)	6/20/2008 11:56:38 AM
From: Fiscally Conservative	Respond to of 206093

Thank you Ed. Eom

To: Ed Ajootian who wrote (103348)	6/20/2008 12:16:18 PM
From: Logain Ablar	Respond to of 206093

Ed: I wanted them to purchase Tangasco :).

To: Ed Ajootian who wrote (103348)	6/22/2008 2:38:26 AM
From: HotnSpicy	Respond to of 206093

The IAE "offer" by END reeks to high heaven. It is extremely opportunistic and stands little chance of succeeding. First off, IAE's 10,000 boed exit '08 is newly revised guidance. Previous guidance was ~7500 boed (almost all oil) and was based using $80 Brent which they expected to see $231MM in cash flow in '09. At $120 Brent (well below '09 strip), current guidance (about 8500 boed ave - starting at 10,000 declining to 7500 before ramping to 20,000+ in early '10) is more than $310MM cash flow in '09. Current mc is a piddling $340MM with $50MM in cash. And in '10, cash flow should nearly triple. If prices hold, in '10, IAE will be generating $1B in annualized cash flow. And in '11, they expect to bring on another 10,000 boed (30,000 boed total), so cf will rise another 50%. Talk about a massive wall of cash about to arrive! The so-called "premium" that END is "offering" is a tiny bit more than 1x '09 cf! That's an ABSURDLY LOW valuation. By year end, IAE shareholders should expect to garner at least an equivalent valuation as END enjoys now (ie about 4x cf) due to much cleaner share structure, lower debt and far better netbacks. 4x cf multiple based on $300+MM cash flow implies about $1.2B market cap, or around $10/share. And IAE has better quality reserves with higher netbacks. Plus IAE has significantly better production ramp over then next few years. IAE shareholders would literally have to be insane to accept this deal. It isn't even all cash. Most of it is in END paper (which, curiously, has seen a recent sudden 75% jump after flat lining for over a year - the cynic in me thinks it isn't a coincidence that an offer just happened to be made, most of which was in paper). Even though IAE and END will have similar production in '09, due to hedges, END will produce ~50% of the cash flow that IAE expects. Yet END is carrying a 3x higher valuation than IAE with half the cash flow, with more debt, with worse share structure and hedges that show significant mark to mark losses. In other words, the market is valuing END's '09 cash flow 6x more than IAE's. Not too hard to understand why I own a ton of IAE shares and absolutely DETEST this offer. But END are no dummies. They see a grossly undervalued producer and are trying to pull a fast one. Even at $3.25, they are literally stealing IAE. IAE is worth significantly more but is in that lull before first production where the market is typically asleep - summer doldrums and poor equity markets have helped to depress IAE share price well below rational values. END's offer is akin to somebody trying to take out OIL at $3.50 just months prior to it seeing first production (and we all know what happened as production approached and how the share price responded - it climbed $10+ in less than a year to around $15.) And IAE has more reserves than OIL did at similar stage of development, less debt, significantly smaller share count and enjoys oil prices 150% greater. At current prices, IAE remains a screaming buy.

To: Ed Ajootian who wrote (103348)	6/22/2008 2:55:33 AM
From: HotnSpicy	Read Replies (1) \| Respond to of 206093

The IAE "offer" by END reeks to high heaven. It is extremely opportunistic and stands little chance of succeeding due to grossly inadequate offer. To give a little background: IAE's 10,000 boed exit '08 is newly revised (upward) guidance. Previous guidance was ~7500 boed and was based using $80 Brent, generating $231MM in cash flow in '09. At $120 Brent, current guidance (about 8500 boed ave - starting at 10,000 declining to 7500 before ramping to 20,000+ in early '10) should generate ~$300+MM cash flow in '09. Current mc is a piddling $340MM with $50MM in cash, so is trading less than 1x '09 cf even after the recent pop (although the share price is just back to where it was a few months ago). And in '10, cash flow should double again as they ramp to 20,000 boed. If prices hold IAE will be generating ~$600+MM in annualized cash flow. And in '11, they expect to bring on another 10,000 boed (30,000 boed total), so cf will rise another ~50%. IAE will see a huge wall of cash starting this year and accelerating to nearly $1 B in '11. Slap a typical 5x cf multiple and IAE could carry a $5B market cap (or $40+ share price). And END expects to take out IAE for $3.25????? Unfriggin believable! The so-called "premium" that END is "offering" is a bit more than 1x '09 cf. That's an ABSURDLY ridiculous valuation. By year end, IAE shareholders should expect to garner at least an equivalent valuation as END enjoys now (ie about 4x cf) due to much cleaner share structure, lower debt and far better netbacks. 4x cf multiple based on $300+MM cash flow implies about $1.2B market cap, or around $10/share. Again, why would ANYONE accept $3.25 now?? IAE has better quality reserves with FAR higher netbacks (mostly oil vs gas and no production hedged at $65). IAE shareholders would literally have to be INSANE to accept this deal. It isn't even all cash. Most of it is in END paper (which, curiously, has seen a recent sudden ~75% jump after flat lining for over a year - the cynic in me thinks it isn't a coincidence that an offer just happened to be made, most of which was in paper). Even though IAE and END will have similar production in '09, END will produce ~50% of the cash flow due to their hedges and lower value nat gas production. Yet END is carrying a 3x higher valuation than IAE? In other words, the market is valuing END's '09 cash flow 6x more than IAE's. Not too hard to understand why I own a ton of IAE shares and absolutely DETEST this offer. But END are no dummies. They (like me) see a grossly undervalued producer and are trying to pull a fast one. Even at $3.25, they are literally stealing IAE. IAE is worth significantly more but is in that lull before first production where the market is typically asleep - summer doldrums and poor equity markets have helped to depress IAE share price well below rational values. But once that wall of cash starts to arrive, the market will wake up in a hurry. END's offer is akin to somebody trying to take out OIL at $3.50 just months prior to it seeing first production (and we all know what happened as production approached and how the share price responded - it climbed in less than a year to around $15.) And IAE has more reserves than OIL did at similar stage of development, less debt, significantly smaller share count and enjoys oil prices 150% greater. At current prices, IAE remains a screaming buy.