How Long Is Longtom?

Anzon’s $250 million bid for Nexus has sparked a frenzy of debate about the respective values of the bidder and target. Both have substantial hydrocarbon exploration interests which are difficult to value, although Anzon has some production as well.

Nexus has strongly resisted the bid and included a report from Ernst & Young in its target’s statement which valued Nexus shares in a range of $0.94 to $1.44 with a most likely value of $1.13. Ernst & Young was influenced by a new estimate of contingent gas resources by Gaffney, Cline and Associates of 316 bscf to 438 bscf. The revised estimate was a substantial increase on previous estimates following reprocessing of existing seismic data from Nexus’ most advanced property—the Longtom appraisal project in Bass Strait.