Important shareholder, lender with board director, and now a bidder. I fear the possibility of influence on the employees/directors may be difficult to resist.

If we take the enterprise value established by the bid together with the Company's latest financial situation report, and divide by the 2P+2C, we get CAD $2.34 per bbloe. This conceals the differing values of reserves plus contingent resources according to location. Referring to the table of Edison Investment Research 11/01/13 it can be seen that companies with 2P+2C in the N.Sea/Western Europe are valued generally between US$5-10bbloe.SLG has 57mmbbloe of such, which would give US$343mm at a conservative valuation of US$6 per bbloe(to bear in mind development wells on Breagh may influence this upwards). In addition there are 55mmbbloe of best estimate prospective resources, which at say US$0.10 would give another US$6mm.

In France and the Netherlands there are 2p+2C of 17mmbbloe worth US$102mm, and 37mmbbloe of best estimate worth US$4mm.

In Romania there are 53mmbbloe 2P+2C, on which a value of US$1.50 might be placed, giving US$80mm, and 405mmbbloe best estimate prospective, which at US$0.05, are worth US$20mm(again there may be increase in the offing).

Totalled together the value of SLG's resource is US$555mm or US$2.5 per share broken down into two groups:-

UK US$349mm or $1.6/share         FR+ND+ROM US$206mm or $0.90/share

As far as Vitol is concerned, their offer  together with the debt they would have to assume, would cost $297mm, a discount of close to 50% on a possibly over-conservative valuation. Personally I am against an outright sale of the Co. but in favour of the disposal of the non-UK assets by a sale of the relative subsidiary companies' shares to Vitol or whoever, for $189mm or better without any assumption of debt. SLG might be able to manage these assets for a fee, and in that way preserve the employment and loyalty of those concerned. We mustn't forget the value of tax allowances on Breagh and Cladhan, which would simply be thrown away if we were to accept the offer, or anything like it, as it stands.