M&A

Thursday, May 14 2009 by emptyend

I've set up this thread as a "home" for any live topics relating to M&A in the Oil sector.

With virtually every stock in the sector continuing to trade well below estimated NAVs, there will be frequent bid situations emerging. Some of these will be agreed bids but, in the present climate, unsolicited bids are also highly likely.

I'm starting the ball rolling with a link to an Australian bid situation, in which the target company (called Target Energy, funnily enough) is rebutting a hostile bidder in typically strong Aussie terms: http://newsstore.theage.com.au/apps/previewDocument.ac?docID=GCA00953206TEX&f=pdf

The link may take some time to download - it is to a 162 page document giving chapter and verse on why Target recommend rejection of a bid that they (and their professional advisers) consider values Target at around HALF its true value. The relevance of the link is that the Grant Thornton section of the document demonstrates a range of different ways of trying to value an E&P company and is therefore of some generic interest to people who own shares in future bid targets.

Target's shares recently hit a low of 2.5 cents before the bid was tabled in mid-April. They are now 5 cents. Grant Thornton (acting for Target) reckon the bid is worth around 6.35c, whereas they think Target is actually worth around 11.9c per share......in other words they reckon that Target was, at its recent lows, trading at only 21% of its true value. So........it will be interesting to see how the defence gets on. [Edit 20/7/09: Successful defence - see http://www.stockopedia.co.uk/forum/view/28067/ma?comment=121#121 ]

What is also interesting from the perspective of a UK holder is that the non-exec Chairman of Target, Didier Mercia, is also a director of Aminex. Holder of Aminex will know that they are another company that has US assets (like Target) that are being substantially undervalued by the market at present.....so it is nice to see Aminex getting a bit of first-hand experience before the predators arrive, in turn, at their door! ;-0

Feel free to add any other bid situations of interest to this thread. [Edit: Do not, however, use it to speculate endlessly about the bid prospects for specific companies, especially where there is little likelihood of M&A news in the near future. Contributions which digress from matters of general sector interest are liable to be removed].

Filed Under: Energy,

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	emptyend	3rd Nov '11	607 of 686	5
Turning back (please!!!) to the general topic of M&A, I am minded to think that those who are looking to make opportunistic purchases of European oil companies may well be sharpening their pencils this weekend. The Greek situation looks likely to provoke some serious volatility and it is possible that (despite being a relatively safe haven sector in relation to Euro problems) the E&P sector may become a focus for M&A..... .....we have a wide range of cashed-up buyers (both majors and NOCs) and we may have some institutional sellers who are keen to raise liquidity even further - and thus perhaps receptive to bids for blocks of stock. I suspect that BG may be near the top of the target list in those circumstances, even though the list of potential buyers is very short (due to BG's size). And it raises the interesting question in my mind whether ExxonMobil is effectively a AAAA credit in current markets. Which would you rather have - 10 year ExxonMobil bonds or (any!) Government bonds? I strongly suspect that there would be terms available for $30-40bn of ExxonMobil debt is they chose to issue some..... ee
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3rd Nov '11

607 of 686

Turning back (please!!!) to the general topic of M&A, I am minded to think that those who are looking to make opportunistic purchases of European oil companies may well be sharpening their pencils this weekend.

The Greek situation looks likely to provoke some serious volatility and it is possible that (despite being a relatively safe haven sector in relation to Euro problems) the E&P sector may become a focus for M&A.....

.....we have a wide range of cashed-up buyers (both majors and NOCs) and we may have some institutional sellers who are keen to raise liquidity even further - and thus perhaps receptive to bids for blocks of stock.

I suspect that BG may be near the top of the target list in those circumstances, even though the list of potential buyers is very short (due to BG's size). And it raises the interesting question in my mind whether ExxonMobil is effectively a AAAA credit in current markets. Which would you rather have - 10 year ExxonMobil bonds or (any!) Government bonds? I strongly suspect that there would be terms available for $30-40bn of ExxonMobil debt is they chose to issue some.....

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	ManSiarad	5th Nov '11	608 of 686	6
A cross-post from the TAQA thread: Bullish talk from Scottish First Minister Alex Salmond, who has just finished a visit to the UAE, about TAQA's plans to expand in the (Scottish) North Sea: http://www.khaleejtimes.com/darticlen.asp?xfile=data/business/2011/November/business_November126.xml&section=business DUBAI/EDINBURGH - Abu Dhabi National Energy Co, the state-run company investing in Europe and Africa, plans to spend at least $600 million over the next two years doubling its North Sea oil output, Scottish First Minister Alex Salmond said. The oil, gas and utility company known as Taqa wants to increase North Sea production to 80,000 barrels a day from the current daily level of 40,000 barrels, Salmond, who runs Scotland’s semi-autonomous government, said in Dubai. “They definitely have their eye on acquisitions,” Salmond said in Dubai. “Taqa will invest in new fields and they also want increasing oil flow from their existing fields.” Taqa has spent $1 billion on capital expenditure in the North Sea over the past three years, Taqa executive Leo Koot said in a statement issued by the Scottish government on November 1. It operates four platforms and has stakes in other fields. It plans to invest at broadly the same level in the next two years as in 2010 and 2011. Taqa hasn’t stated publicly its future North Sea production targets, the company said in an e-mailed response to questions from the UAE capital. The Scottish government supports changes to the North Sea tax structure associated with recovering oil from smaller fields such as those operated by Taqa, Salmond said. Taxation falls under the remit of the UK government in London. I heard Salmond talking at a reception in Abu Dhabi on Tuesday night - he had met with TAQA earlier in the day. Very positive noises about his talks and about TAQA's involvement generally. No specific details, of course. I wonder what acquisitions are being planned. --- Let's assume, for the sake of argument, that they can increase output from existing fields and licences by 20,000 b/d over the next couple of years - and that's a pure guess. How are they going to find the other 20,000 b/d ? Buying up small stakes in existing fields from smaller stakeholders might be one way of going about it, but TAQA are clearly getting an appetite for being NS operators. Perhaps buying a company (or two) with good acreage but little in trhe way of resources to develop them? Man Siarad
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5th Nov '11

608 of 686

A cross-post from the TAQA thread:

Bullish talk from Scottish First Minister Alex Salmond, who has just finished a visit to the UAE, about TAQA's plans to expand in the (Scottish) North Sea:

http://www.khaleejtimes.com/darticlen.asp?xfile=data/business/2011/November/business_November126.xml&section=business

DUBAI/EDINBURGH - Abu Dhabi National Energy Co, the state-run company investing in Europe and Africa, plans to spend at least $600 million over the next two years doubling its North Sea oil output, Scottish First Minister Alex Salmond said.

The oil, gas and utility company known as Taqa wants to increase North Sea production to 80,000 barrels a day from the current daily level of 40,000 barrels, Salmond, who runs Scotland’s semi-autonomous government, said in Dubai.

“They definitely have their eye on acquisitions,” Salmond said in Dubai. “Taqa will invest in new fields and they also want increasing oil flow from their existing fields.” Taqa has spent $1 billion on capital expenditure in the North Sea over the past three years, Taqa executive Leo Koot said in a statement issued by the Scottish government on November 1. It operates four platforms and has stakes in other fields. It plans to invest at broadly the same level in the next two years as in 2010 and 2011.

Taqa hasn’t stated publicly its future North Sea production targets, the company said in an e-mailed response to questions from the UAE capital.

The Scottish government supports changes to the North Sea tax structure associated with recovering oil from smaller fields such as those operated by Taqa, Salmond said. Taxation falls under the remit of the UK government in London.

I heard Salmond talking at a reception in Abu Dhabi on Tuesday night - he had met with TAQA earlier in the day. Very positive noises about his talks and about TAQA's involvement generally. No specific details, of course.

I wonder what acquisitions are being planned.

---

Let's assume, for the sake of argument, that they can increase output from existing fields and licences by 20,000 b/d over the next couple of years - and that's a pure guess. How are they going to find the other 20,000 b/d ? Buying up small stakes in existing fields from smaller stakeholders might be one way of going about it, but TAQA are clearly getting an appetite for being NS operators. Perhaps buying a company (or two) with good acreage but little in trhe way of resources to develop them?

Man Siarad

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	emptyend	21st Nov '11	609 of 686	4
Big deal from Centrica today Centrica establishes strategic partnership with Statoil and announces £1bn Norwegian asset acquisition £13 billion 10 year gas supply deal for the UK from 2015 boosting energy security £1 billion acquisition of producing and development assets in the Norwegian North Sea Strategic agreement for partnership on gas exploration opportunities in Norway and the UK Centrica plc, the parent company of British Gas, today signed a strategic agreement with Statoil ASA for the supply of 50 billion cubic metres (bcm) of gas to the UK. The 10 year, NBP-linked gas supply contract begins in 2015 and secures sufficient gas to meet around five per cent of total UK annual demand, enough for 3.5 million homes. With Britain currently importing around 50 per cent of its gas requirements, the announcement underlines the strategic importance of the Norwegian relationship to UK energy security. In a separate transaction, Centrica also announced it has reached agreement with Statoil Petroleum AS to acquire a focused package of producing and development oil and gas assets in the Norwegian sector of the North Sea, for a cash consideration of US$1,525 million (£965 million)
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21st Nov '11

609 of 686

Big deal from Centrica today

Centrica establishes strategic partnership with Statoil and announces £1bn Norwegian asset acquisition

£13 billion 10 year gas supply deal for the UK from 2015 boosting energy security

£1 billion acquisition of producing and development assets in the Norwegian North Sea

Strategic agreement for partnership on gas exploration opportunities in Norway and the UK

Centrica plc, the parent company of British Gas, today signed a strategic agreement with Statoil ASA for the supply of 50 billion cubic metres (bcm) of gas to the UK. The 10 year, NBP-linked gas supply contract begins in 2015 and secures sufficient gas to meet around five per cent of total UK annual demand, enough for 3.5 million homes. With Britain currently importing around 50 per cent of its gas requirements, the announcement underlines the strategic importance of the Norwegian relationship to UK energy security.

In a separate transaction, Centrica also announced it has reached agreement with Statoil Petroleum AS to acquire a focused package of producing and development oil and gas assets in the Norwegian sector of the North Sea, for a cash consideration of US$1,525 million (£965 million)

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	Fangorn	21st Nov '11	610 of 686
http://uk.reuters.com/article/2011/11/21/vietnam-energy-biding-idUKL4E7ML1DD20111121?rpc=401&feedType=RSS&feedName=mergersNews&rpc=401 TNK-BP seeks to bid for more Vietnam oil/gas blocks.... Perhaps they should consider a takeover of an already establ;ished Vietnam player :) One can but hope.
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	emptyend	21st Nov '11	611 of 686
In reply to Fangorn, post #610 One can but hope. Which one? Us or them? ;-) I read that as primarily a willingness to take on more explo risk - but they are certainly a possibility for the queue.
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21st Nov '11

611 of 686

In reply to Fangorn, post #610

One can but hope.

Which one? Us or them? ;-)

I read that as primarily a willingness to take on more explo risk - but they are certainly a possibility for the queue.

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	Fangorn	21st Nov '11	612 of 686
In reply to emptyend, post #611 Both :) Them that they can buy us at a reasonable price. US that we get a minimum of 600p/sh :) Wonder if the christmas wish will come early this year! Agree that they were primarily looking at taking on more explo risk but hopeful that it might also be the firing of the starting pistol to herrald the beginning of expected consolidation in the O&G sector
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21st Nov '11

612 of 686

In reply to emptyend, post #611

Both :)

Them that they can buy us at a reasonable price. US that we get a minimum of 600p/sh :)

Wonder if the christmas wish will come early this year!

Agree that they were primarily looking at taking on more explo risk but hopeful that it might also be the firing of the starting pistol to herrald the beginning of expected consolidation in the O&G sector

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	ohisay	7th Dec '11	613 of 686	2
Anardako looking to cash in some assets in East /Africa and Brazil. http://www.bloomberg.com/news/2011-12-06/anadarko-considers-potential-sale-of-mozambique-gas-fields.html Brackett, who has a “market perform” on Anadarko shares and owns none, said the company may seek a partner such as a large integrated oil company to help with marketing and building of an LNG gas-export plant. A facility that would turn the gas into liquid for exporting may cost $6 billion or more, Brackett said. Anadarko has said it may look to build two to six LNG production units so gas could be sent to Asia or elsewhere. The company’s current Mozambique partners include Cove Energy Plc (COV) and Mitsui & Co. (8031) Anadarko has said it’s considering a sale of its share in Brazilian offshore blocks to help pay off debt, assets analysts estimate may be worth $3 billion to $5 billion. Anadarko President Al Walker said at a Bank of America Corp. conference on Nov. 15 the company will probably make a final investment decision on the Mozambique project before deciding on a possible sale of some holdings. “We hope there will be options to consider how to use the position that we’ve taken to lever it into using some other people’s money along the way to the benefit of them as well as ourselves,” Walker said last month. “It is going to be a very capital-intensive project, as LNG projects are.”
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	ohisay	9th Dec '11	614 of 686	2
More rumbles from the jungle. http://www.reuters.com/article/2011/12/09/brazil-oil-sinopec-idUSL3E7N93D520111209?rpc=401 Britain's BG will announce the sale of part of its Brazilian oil unit in the coming weeks, and Sinopec, China's second-largest oil company, is the leading candidate, a source with knowledge of the talks told Reuters. BG declined to comment. Sinopec's ability to muscle out Brazil's state-led Petrobras , which has expressed interest in the fields, shows how the Rio de Janeiro-based company's $225 billion business plan, the world's largest corporate investment program, has crimped its ability to challenge rivals for a bigger share of the "filet mignon" of Brazil's offshore, the source said. "They (BG) are demanding a high price for a share in subsalt," he said. "Petrobras's cash-flow is already under (too much) pressure from its business plan to be able to fight for this under these conditions." If Sinopec Group wins, it would own part of all the "super-giant" offshore oilfields in an area known as "the Santos subsalt pole," the center of an area believed to contain 50 billion barrels of oil, enough to supply all of China's needs at current consumption levels for more than 15 years. BG says that its has as much as 8 billion barrels of oil and natural gas equivalent reserves in the Santos subsalt pole. Assuming it plans to sell only a minority stake, the sale could net the company as much as $27 billion, an analyst said. The estimate is based on the sale of 49 percent of BG's Brazilian unit and values its reserves at $7 a barrel, a price considered reasonable. Reserves in fields under development and still requiring billions of dollars of additional investment usually sell for far less than the current price of oil. 27 Billion $ would be about £5 a share....
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9th Dec '11

614 of 686

More rumbles from the jungle.

http://www.reuters.com/article/2011/12/09/brazil-oil-sinopec-idUSL3E7N93D520111209?rpc=401

Britain's BG will announce the sale of part of its Brazilian oil unit in the coming weeks, and Sinopec, China's second-largest oil company, is the leading candidate, a source with knowledge of the talks told Reuters.

BG declined to comment.

Sinopec's ability to muscle out Brazil's state-led Petrobras , which has expressed interest in the fields, shows how the Rio de Janeiro-based company's $225 billion business plan, the world's largest corporate investment program, has crimped its ability to challenge rivals for a bigger share of the "filet mignon" of Brazil's offshore, the source said.

"They (BG) are demanding a high price for a share in subsalt," he said. "Petrobras's cash-flow is already under (too much) pressure from its business plan to be able to fight for this under these conditions."

If Sinopec Group wins, it would own part of all the "super-giant" offshore oilfields in an area known as "the Santos subsalt pole," the center of an area believed to contain 50 billion barrels of oil, enough to supply all of China's needs at current consumption levels for more than 15 years.

BG says that its has as much as 8 billion barrels of oil and natural gas equivalent reserves in the Santos subsalt pole. Assuming it plans to sell only a minority stake, the sale could net the company as much as $27 billion, an analyst said.

The estimate is based on the sale of 49 percent of BG's Brazilian unit and values its reserves at $7 a barrel, a price considered reasonable.

Reserves in fields under development and still requiring billions of dollars of additional investment usually sell for far less than the current price of oil.

27 Billion $ would be about £5 a share....

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	emptyend	9th Dec '11	615 of 686
In reply to ohisay, post #614 27 Billion $ would be about £5 a share.... No it wouldn't. It's a bit over £8. And I suspect that it may turn out to be worth a bit more than that for a clean sale. ee
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9th Dec '11

615 of 686

In reply to ohisay, post #614

27 Billion $ would be about £5 a share....

No it wouldn't. It's a bit over £8. And I suspect that it may turn out to be worth a bit more than that for a clean sale.

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	ohisay	9th Dec '11	616 of 686
In reply to emptyend, post #615 No it wouldn't. It's a bit over £8. You havent read the article - its 27bn dollars not pounds.
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9th Dec '11

616 of 686

In reply to emptyend, post #615

No it wouldn't. It's a bit over £8.

You havent read the article - its 27bn dollars not pounds.

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	emptyend	9th Dec '11	617 of 686	1
No it wouldn't. It's a bit over £8. You havent read the article - its 27bn dollars not pounds. Wrong. I read the article exactly. I also read this page which shows that there are 2.15bn shares outstanding in BG...... ....so....$27bn divided by 2.15bn is $12.55 per share ....and converted to Sterling at, say, 1.56 = £8.05 per share. Thats where I got my figures from. However, it appears from this that the S'pedia numbers are wrong, and I've asked them to correct. I'd also still think that the estimate of $27bn may prove a bit light. ee
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9th Dec '11

617 of 686

No it wouldn't. It's a bit over £8.

You havent read the article - its 27bn dollars not pounds.

Wrong. I read the article exactly. I also read this page which shows that there are 2.15bn shares outstanding in BG......

....so....$27bn divided by 2.15bn is $12.55 per share ....and converted to Sterling at, say, 1.56 = £8.05 per share.

Thats where I got my figures from. However, it appears from this that the S'pedia numbers are wrong, and I've asked them to correct.

I'd also still think that the estimate of $27bn may prove a bit light.

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	kenobi	9th Dec '11	618 of 686
Doesn't that make BG a bit of a bargain ? if selling half of one of it's assets gives £8 per share, and they're trading at 12-13 pounds per share ? I have a few , but I must admit to not really understanding the portfollio, I guess those 20 pound plus estimates you sometimes read about aren't so pie in the sky? K
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	ohisay	9th Dec '11	619 of 686	3
In reply to kenobi, post #618 Kenobi .. 1.Its 5£ per share for 50% of the field if the 27bn $ price is correct. 2.Yes it is a bargain.
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9th Dec '11

619 of 686

In reply to kenobi, post #618

Kenobi ..

1.Its 5£ per share for 50% of the field if the 27bn $ price is correct.

2.Yes it is a bargain.

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	oilretire	21st Jan '12	620 of 686	2
Ernst & Young 2011 M&A summary & details of a webcast on Tuesday on 2011 & their view on 2012 http://www.ey.com/GL/en/Newsroom/News-releases/Oil-and-Gas-M-and-A-in-2011-volume-up--values-down 1322 oil and gas transactions were announced in 2011, an increase of more than 5% when compared to 2010 proving that this remains one of the most resilient global sectors for mergers and acquisitions. The aggregate value of oil and gas transactions in the year totaled US$317b. The 2011 deal value was about 7% below last year’s US$341b, largely as a result of a lack of mega deals. In 2010, there were 76 oil and gas transactions valued in excess of US$1b; in 2011 this figure had declined to 71......... Webcast: 2011 Global Oil & Gas Transactions Review Webcast Date: Tuesday, 24 January 2012 Time: 9:00-10:00 New York; 14:00-15:00 London Registration: To register for this webcast please click here. Join Ernst & Young's Global Oil & Gas Transaction Advisory Services Team as we launch our report into transaction activity in 2011 and share our outlook for 2012.
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21st Jan '12

620 of 686

Ernst & Young 2011 M&A summary & details of a webcast on Tuesday on 2011 & their view on 2012

http://www.ey.com/GL/en/Newsroom/News-releases/Oil-and-Gas-M-and-A-in-2011-volume-up--values-down

1322 oil and gas transactions were announced in 2011, an increase of more than 5% when compared to 2010 proving that this remains one of the most resilient global sectors for mergers and acquisitions.

The aggregate value of oil and gas transactions in the year totaled US$317b. The 2011 deal value was about 7% below last year’s US$341b, largely as a result of a lack of mega deals. In 2010, there were 76 oil and gas transactions valued in excess of US$1b; in 2011 this figure had declined to 71.........

Webcast:

2011 Global Oil & Gas Transactions Review Webcast
Date: Tuesday, 24 January 2012
Time: 9:00-10:00 New York; 14:00-15:00 London
Registration: To register for this webcast please click here.

Join Ernst & Young's Global Oil & Gas Transaction Advisory Services Team as we launch our report into transaction activity in 2011 and share our outlook for 2012.

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	emptyend	22nd Jan '12	621 of 686	1
Anadarko are being slated as a possible bidder/partner for Rockhopper Exploration (LON:RKH). More interestingly there are now apparently: six companies are now interested in becoming partners. ....which suggests a credible auction scenario is in prospect. Meanwhile, I'm wondering what is going on elsewhere.....I suspect we are moving into the season for strategic M&A as results get finalised etc. ee
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22nd Jan '12

621 of 686

Anadarko are being slated as a possible bidder/partner for Rockhopper Exploration (LON:RKH).

More interestingly there are now apparently:

six companies are now interested in becoming partners.

....which suggests a credible auction scenario is in prospect.

Meanwhile, I'm wondering what is going on elsewhere.....I suspect we are moving into the season for strategic M&A as results get finalised etc.

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	Leekgo	23rd Jan '12	622 of 686	2
DId i miss this over the week end? http://www.investegate.co.uk/Article.aspx?id=20120123070012M4213 Looks like an offer for Ithaca might be about to emerge. This might add to the growing excitement at the smaller end of the E&P UK market among PIs..... Wonder who the bidder might be? My selling timing is appalling. I have sold small stakes in both Rockhopper AND Ithaca in the last few weeks.... Leek
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	emptyend	23rd Jan '12	623 of 686	1
DId i miss this over the week end? Not unless you are an avid watcher of the TSX. The shares were up 27 cents on Friday to CAD 2.48.....and I guess that must've all happened after the London close as there was no indication here. As to who, I have noted over here that KNOC's Dana now have a "$900mn warchest"....and then there is possibly Premier Oil (LON:PMO), though I guess one of their partners or someone with adjacent acreage might make more sense? ee
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23rd Jan '12

623 of 686

DId i miss this over the week end?

Not unless you are an avid watcher of the TSX. The shares were up 27 cents on Friday to CAD 2.48.....and I guess that must've all happened after the London close as there was no indication here.

As to who, I have noted over here that KNOC's Dana now have a "$900mn warchest"....and then there is possibly Premier Oil (LON:PMO), though I guess one of their partners or someone with adjacent acreage might make more sense?

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	flyinghorse	23rd Jan '12	624 of 686	1
It could be Dyas for Ithaca http://www.dyas.nl/ukassets.html
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23rd Jan '12

624 of 686

It could be Dyas for Ithaca

http://www.dyas.nl/ukassets.html

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	Fangorn	23rd Jan '12	625 of 686	2
Things certainly are picking up on the takeover front Oil sector side, assuming of course there's elements of truth to all the rumours. Currently in play,it seems: COV, GKP, IAE, RKH I'm sure I've missed a couple...Interesting times.
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	emptyend	23rd Jan '12	626 of 686	1
In reply to Fangorn, post #625 Currently in play,it seems: COV, GKP, IAE, RKH I'm sure I've missed a couple...Interesting times. I'm sure you'll have missed at least a couple too - partly because there are at least 20 E&P stocks that are up by over 20% in the last month, according to Digital Look. I do get the impression that the long-awaited M&A wave may soon arrive, now that an apparently more stable macro environment (ie no major catastrophes in the last few weeks) may be emerging. The results season is likely to focus quite a few minds, I suspect, especially with share prices having been beaten down well below fundamantal value in many cases - and especially with the Iran concerns bubbling along. Comments such as those in the FT today: Saudi Arabia sent a crystal clear message last week to the oil market: $100 a barrel is the new normal. ...may also be focussing minds, given that the sector has long been priced by analysts on the assumption that $90 is the fair price longer-term. ee
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23rd Jan '12

626 of 686

In reply to Fangorn, post #625

Currently in play,it seems:

COV, GKP, IAE, RKH

I'm sure I've missed a couple...Interesting times.

I'm sure you'll have missed at least a couple too - partly because there are at least 20 E&P stocks that are up by over 20% in the last month, according to Digital Look.

I do get the impression that the long-awaited M&A wave may soon arrive, now that an apparently more stable macro environment (ie no major catastrophes in the last few weeks) may be emerging. The results season is likely to focus quite a few minds, I suspect, especially with share prices having been beaten down well below fundamantal value in many cases - and especially with the Iran concerns bubbling along.

Comments such as those in the FT today:

Saudi Arabia sent a crystal clear message last week to the oil market: $100 a barrel is the new normal.

...may also be focussing minds, given that the sector has long been priced by analysts on the assumption that $90 is the fair price longer-term.

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