Talon has finally struck a deal Strike (STX) for the WA gas assets.

Back of the envelope calculation of value.

Scrip in STX - 0.4828 shares x 0.44c = 21c per TPD share

Mongolian asset (Gurvantes XXXV), based on TMK MC of $75M less $7M cash / 2 = $34M

to explain, TMK has 2/3, TPD 1/3 so TPD's share should be half the value of TMK's one, right?

$34M residual value = about 5c per share.

Total value (21 + 5) = 26c per TPD share.

I haven't read the full scheme arrangement which includes $6M of financing from STX to TPD and other factors. Best chance would be for TMK to raise some cash to buy TPD's share in Gurvantes XXXV

Talon does gas exploration and development in two main areas: Perth Basin and Mongolia.

In WA, the main asset is Walyering, a JV with Strike energy (45% TPD). First production is expected in April 2023 and there is an offtake agreement with Santos. This should generate $30M pa FCF to Talon. ($50-75M total)

Talon has 33% of the Mongolian project, Gurvantes XXXV, coal seam gas. Recent 2C of 1.2 TcF (400 Bcf for Talon). First pilot well spudded in early April 23. The project has an offtake agreement for electricity from the pilot that should help fund further development. Given China's appetite for gas, this project has an obvious customer across the border and Mongolia is a fairly safe jurisdiction. Partner here is ASX:TMK.

Other Perth basin projects include Condor (100%) and a 25% JV with Triangle energy and NZO of permits L7 and EP437. 3D seismic data from L7 is good and location near pipelines. Planning to drill this in 2024.

There have been two recent cap raises (both placement + SPP) one in Dec 22 at 14c and one in April 23 at 14.5c.

Market cap at current price 15.5c = $100M (approx). That seems cheap given the potential free cash flow from Walyering alone with great upside from other projects.

Investor Presentation (asx.com.au)