Q2 call transcript, Don Lindsay, Q&A regarding aquisitions and opportunities!
posted on
Jul 24, 2015 09:39AM
Operator:
The following question is from Harry Mateer from Barclays. Please go ahead.
Harry Mateer:
Hi, good morning. A couple of questions. I guess first, Don, in the past you had indicated that you might be willing to issue equity to buy assets. Can you just talk about what you are seeing in that market? Are there any opportunities or is that just not viable with your equity at this level?
Don Lindsay:
Yes. I just sort of add some clarity to the comment. The nature of the questioning at the time, this is on the last quarterly caller, probably anytime you want to ask me a question, you always have to get to a situation where you say never say never, but our bias is strongly against issuing equity at all and you are near these price levels. And if it were for an acquisition, it would have to be quite an extraordinary acquisition for us to think that it was so accretive that we would issue equity. So, that’s the one point on issuing equity. On what we are seeing in the acquisitions market, not much, you can read in the papers about different activities that are ongoing, but the odds of us being sort of involved at a point where we would actually make an acquisition are quite slim at the best of times. And I don’t think anything has changed. The fact is when the industry went through its consolidation phase from about 10 years ago to 5 years ago, a lot of the good opportunities were taken then and that are held in the strong hands and they are unlikely to free up. We saw opportunities we will be interested in. An exploration worldwide generally hasn’t been that successful. And where there are discoveries, one thing we have learned as an industry is that at least 10, 12 years, probably 15 before there would be any production from those discoveries – to those discoveries. And so if you are looking to grow near the medium-term production and cash flow, there is very, very little out there.