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This article is contributed by Australasian Investment Review – (AIR) You can subscribe for their free newsletter at www.aireview.com.au

Strike Oil Makes Gas Discovery
January 30th. 2008 - Australasian Investment Review – (AIR)

Strike Oil (STX) has made a gas discovery at its Rayburn project, in Texas USA which has been designated Cypress Eagle Field.

The oil and gas explorer said its Duncan 1 well, stabilised flow rates of 10.1 million cubic feet of gas per day and 260 barrels of light gravity condensate from the gas.

“Gross revenues from this well at the above rates equates to around $100,000 per day. This result coupled with production from the Mesquite Project and further wells on Rayburn suggest that net revenues to Strike Oil could be of the order of $2 million per month by mid 2008,” the company said.

The company said Duncan 2 and Gilbert-Freeman 1 production facilities and flow lines being installed to allow production testing this quarter, as pipelines are completed.

Strike Oil said a revenue of $2 million per month could be expected by mid 2008.

The stabilised gas flow from the Duncan 1 well coupled with the drilling results from the other wells is very encouraging,” managing director Simon Ashton said.

Shares in STX ended 1 cent up at 28 cents.

Lion Nathan Arranges $450 Million Funding.

Shares in Lion Nathan rose by as much as 2.9% after the company said it had refinanced its existing debt facilities through securing $450 million of new debt funding.

This new funding will be used to refinance the 12 month bridge facility used to fund the acquisition of J Boag & Son ($325) million and finance a $60 million scheduled partial maturity of Lion Nathans’ US Private Placement facility due in February 2008.

The new funding has a weighted average maturity of 4.3 years and was arranged by Lion Nathan within its existing Banking Group, the company said.

“Given the current volatility in financial markets, it is very pleasing to be able to arrange this funding from within our existing Banking Group. We tapped our relationship banks and we were pleased to receive offers well in excess of our funding requirement, at very attractive pricing,” Chief financial officer Jamie Tomlinson said.

“Lion Nathan prides itself on its resilient earnings and cash flow and successfully arranging this funding once again demonstrates the strength and attractiveness of our business,” he added.

In addition, the new facility will also supplement Lion Nathan’s strong cash flow and enable the company to finance the planned capital expenditure in New Zealand as construction of Lion Nathan’s new brewery commences in Auckland.

Shares in LNN finished 13 cents up at $9.47.

Commander Reveals ‘Turnaround Plan.

Shares in Commander Communications rose almost 20% during intraday trading on Wednesday after the company said it agreed to a new debt repayment deal with its bankers.

The telecommunications services provider said its banking syndicate has agreed to re-schedule $115 million October 2008 facility repayment to October 2009, as well extending the $7 million of the $10 million repayment due at the end of February also to October 2009.

In a 19 page media release to the stock market, which included presentation slides, Commander outlined its ‘turnaround’ plan which aims to restructure the business to focus on delivering shareholder value going forward.

“The strategic review confirmed my view that the core value drivers in Commander’s businesses are sound,” managing director Amanda Lacaze said.

“However, some areas of the business are underperforming or are simply unprofitable. By taking decisive action today, I am confident we can maximise value for both customers and shareholders,” she added.

This might not appease some investors whose CDR shares have lost more than two thirds in value since Commander declared a loss in October for the 06/07 financial year.

Sydney-based Commander announced a loss of $5.3 million last financial year, after it turned a profit of $26 million in 2006.

“Following the restructure, Commander will quickly emerge as a more focused provider of services to selected attractive market segments where Commander either has or can build competitive advantage,” said Commander.

The share price rose during intraday trading but is still trading close to all time lows.

Shares in CDR have lost significant ground over the last 12 months, dropping as much as 93% from a height of over $2.13 to a low of just 15 cents.

CDR finished half a cent down at 17.5 cents, whilst more than 4.5 million shares had changed hands.

Herald Recommends New Offer, Shares Soar.

After recommending a separate takeover offer just last week, the board of gold and base metals explorer, Herald Resources (HER) officially jumped ship on Wednesday after announcing its unanimous support for a new offer (worth $504.8 million) from Indonesia’s Antam group and Zhongjin of China.

Last week the board unanimously recommended the initial takeover offer made on 12 December, from Indonesian coal miner PT Bumi Resources, worth $455 million.

Antam and Zhonjgjin are offering $2.50 cash per share for the entire issued capital of Herald, compared to PT Bumi’s offer of $2.25 per share.

In a joint release to the ASX, Antam, Zhongjin and Herald Resources said: “The board of Herald Resources withdraws their previous recommendation to accept the lower offer of $2.25 per share of Calipso Investment (a wholly owned vehicle of PT Bumi) and unanimously recommends that shareholders accept the Antam/Zhongjin offer in the absence of a superior proposal.”

The Antam/Zhongjin offer is 25 cents per share higher than the Calipso offer of $2.25 per share and represents a premium of $0.236 over the volume weighted average of all Herald share traded since the announcement of the Calipso offer.

“We believe that the Antam / Zhongjin offer represents an excellent outcome for Herald’s shareholders and we will be working with them to ensure that this offer is put to shareholders as expediently as possible,” Chairman of Herald Resources Terrence Allen said.

Strengthening its position, Antam on Wednesday acquired a 10.7% relevant interest in HER shares.

The takeover offer from the Antam/Zhongjin is subject to Foreign Investment Review Board approval and minimum acceptance condition of 50.1%.

Antam is a state-controlled Indonesian mining group that already holds 20% interest in Herald Resource’s 80%-owned Dairi zinc/lead project in Northern Sumatra Indonesia.

Zhongjin is a zinc/lead mining and smelting company based in the People’s Republic of China and operates the low cost Fankou mine.

The primary and most attractive asset of Herald Resources is an 80% interest in the high-grade zinc/lead Dairi Project in Indonesia.

On 3 January, 2008 the company said it received positive metallurgical testing results from the project. The ore from Lae Jehe deposit at the Dairi project has a resource of 6.5 million tonnes at 11% zinc and 6% lead, the company said.

The bidding war has provided share price support in a volatile market . Trading around $1.83 before the bid from Calipso on December 11, HER has been trading at an average of $2.229 ever since.

Following the takeover announcements, shares in HER hit a 52-week high of $2.60 during intraday trading today.

This is more than 200% increase from its 1-year low of 99 cents back in April 2007.

Shares added 8 cents to $2.58.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au




	
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