Sheffield21 Oct 2022 09:18
The master position in the Beetaloo was moved from FOG/POQ to Sheffield. FOG/POQ did not fight back successfully to get a higher price for giving up the master position in this basin. POQ even had not enough negotiation skills/power to wait for the ROFR dead line to announce on the last possible day that FOG gives up the ROFR. The ROFR was the last chance to get the master position in the Beetaloo back to FOG. Obviously Sheffield is keen to get the Beetaloo master position and spent already more than $100 million for this strategy. But POQ gave up FOGs only chance ASAP after Sheffield has written him a letter only. Do you still think that POQ is acting to get the best results for FOGs share holders (except for Sheffield)?
The ROFR is spilled milk now and for the future it will be more important to watch Mr Sheffield:
First Mr Sheffield owns 38,75% of the asset. With this asset he can decide within a second if he sells it or not because he is the only owner of this 38.75 % share. But ORG will get a royality and will buy a part of the future gas production.
Sheffield controlls 8.66% of FOG which got a passive 22.5% share of the asset. For me it is still a strange move that POQ said that it is off the table to sell FOGs Beetaloo after verifying commerciality which is seen as best strategy to get a high price & early money for an E&P asset. Instead now the plan is to produce the Beetaloo and to join the sky high high investments for development, ending up in more dilution or farm out. One explanation could be that POQ with his negotiation skills has no more interested buyers or it was the decision of Mr Sheffield. One argument could be that FOG does not have the 5,5 royality nor sold already a part of the future gas production. I think POQ surrended FOG´s degree of freedom to Sheffield without getting an adequate price.
Sheffield controlls 4.19% of Empire. Empire got some assets in the neighbourhood of FOGs assets
Sheffield controlls 15.2% of TBN, the new australian operator of our Beetaloo, which owns 38.75% of the asset. For this 38.75% TBN has to pay 5.5% royality to ORG but on the other hand a part of the future gas production is already more or les sold to ORG.
It is said that Mr Sheffield will share a part of the Beetaloo with somebody else. IMO this could be the LNG companies in Darwin. The question is, which share of his many shares in the Beetaloo will be sold.
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