Based on yesterday’s closing price for Anzon, this values Nexus shares at 65c but the stock has been consistently trading above 70c for the last fortnight. Yesterday, the stock closed at 73c.

However, two factors could trigger a drop in Nexus’s share price.

The first would be profit-taking by a group of selected investors who recently received a large tranche of Nexus shares at 47c.

The second would be disappointing results from the much-hyped Longtom-3 well. Drilling at Longtom-3 is approaching and results from that operation are expected to be known in July.

Success at Longtom-3 would trigger a gas supply deal with Santos and probably lead to Santos farming-in to 35% of the prospect, bringing cash flow and a nice lump sum money for developing Nexus’ other prospects.

However, disappointing results at Longtom-3 would raise difficult questions for Nexus. Some industry sources are sceptical that Longtom will deliver the volumes of gas that Nexus expects it to.

"If results from Longtom-3 don't meet expectations, it is hard to see how Nexus will be able to fund its future activities," Anzon managing director Steven Koroknay told EnergyReview.net.

Anzon expects to send the statement to Nexus shareholders in mid-April. The offer would then have a closing date of mid-to-late May but this could easily be extended. The terms of offer could also be changed.

But Koroknay told EnergyReview.net he was hoping for a result before Longtom-3 spudded.

“It’s early days yet and it’s common for a takeover target’s share price to surge initially,” he said. “The price could well fall before our offer closes.”

In its bidder’s statement, Anzon reiterated its stance that the two offshore companies complemented each other, with Anzon’s cash flow and Nexus’ prospective acreage opening the way for an aggressive exploration program.

Anzon’s petroleum resource rent tax obligations also meant that in a combined entity, tax liabilities could be used to offset the costs of Nexus’ exploration, giving appraisal and exploration expenditure a 40% tax reduction.

Nexus managing director Ian Tchacos has urged his company’s shareholders to make no response to the bid until Nexus releases its target’s statement within the next two weeks.