# LNR - Lonestar Resources



## System (9 January 2013)

Lonestar Resources Limited (LNR) was formerly known as Amadeus Energy Limited (AMU).

Previous discussion of this company can be found in the AMU thread: https://www.aussiestockforums.com/forums/showthread.php?t=1958


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## tradernor (4 June 2014)

*LNR - LONESTAR rises after the upgrade to OTCQX*

LNR rose 11% in the US and 12% on Sydney after it began trading on OTCQX two days ago.
Or is it something brewing for this cheap energy stock?


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## raimop (4 June 2014)

*Re: LNR - LONESTAR rises after the upgrade to OTCQX*



tradernor said:


> LNR rose 11% in the US and 12% on Sydney after it began trading on OTCQX two days ago.
> Or is it something brewing for this cheap energy stock?




It seem to me that Aussie oil and gas exploration companies that are active in the USA benefit from being listed on US  or Canadian exchanges as it gives them far more exposure. A point in case is Aurora Oil & Gas. Its only asset was leases in the Eagle Ford Shale area. It was listed on the ASX and the Toronto Exchange. It was recently taken over by Baytex a Canadian company who paid a substantial premium for it.

All IMHO and DYOR.
I hold


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## Echidna50 (4 June 2014)

*Re: LNR - LONESTAR rises after the upgrade to OTCQX*



tradernor said:


> LNR rose 11% in the US and 12% on Sydney after it began trading on OTCQX two days ago.
> Or is it something brewing for this cheap energy stock?




WelI, I believe they will upgrade to Nasdaq or NYSE because their lender (Wells Fargo) is also American.


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## Echidna50 (7 June 2014)

*Re: LNR - Lonestar Resources, a takeover target?*

*Oil and gas sector now in play for mergers*

    Richard Hemming

_ The Australian_

    June 07, 2014 12:00AM


SMALL listed oil and gas companies look to be increasingly on the auction block as bigger predators eye takeover opportunities to boost production growth given higher operating costs, a relatively high oil price and increasing domestic gas prices.

This was certainly the case for Karoon Gas Australia, whose shares spiked 46 per cent from $2.54 where it was in late April prior to its suspension of trading due to funding uncertainty. It got to as high as $3.72 this week after Origin Energy lifted the previously cash-strapped oil and gas minnow out of the grave.

Origin is on the hook to buy Karoon’s 40 per cent interest in two exploration permits for potentially large offshore gas fields in Western Australia’s Browse Basin. The deal delivers Karoon $US600 million ($647m) upfront and payments of up to $US200m if things go well for Origin.

The transaction follows other merger and acquisition activity in the sector, including the Horizon Oil (HZN) and Roc Oil (ROC) merger, the all scrip takeover by Drill Search for Ambassador Oil and Gas (AQO) and the $1.84 billion takeover of US-based oil producer Aurora Oil and Gas by Canada’s Baytex Energy.

Canaccord Genuity’s oil and gas analyst Johan Hedstrom explains why there is more M&A activity in the sector in comparison to others. He said:

“There is more takeover activity in oil and gas because the share prices have fallen, yet the oil price is $US100 plus and gas prices in Australia are rising. This is unlike other commodities like iron ore, copper and gold, which have been under sustained pressure.”

Hedstrom predicts that there will be more activity in the sector as big companies go looking for cheap assets, and small companies look for scale:

“There is going to be speculation about more activity because so many companies’ prices have become irrelevant for investors. Mergers produce scale which will attract institutions.”

Hedstrom says that candidates on the takeover front include Beach Energy (BPT), Drillsearch Energy (DLS) and Senex Energy (SXY) because of their shale gas enterprises in the Cooper Basin.

At the smaller end he includes Cooper Energy (COE) as well as Sundance Energy (SEA) *and Lonestar Resources (LNR)*. He also singles out Karoon (KAR). “This is a huge deal for the company and means it can develop its assets in Peru and Bazil.”


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## tradernor (8 June 2014)

*LNR - LONESTAR and SeekingAlpha Bullish Article Today*

The best financial publication in the US, SeekingAlpha, launched a very bullish article today about Lonestar Resources.

The author, "Value Digger", who has a proven track record (his previous call yielded 120% in 3 weeks), explains why LNR is grossly undervalued at $0.35 (US listing). 

The article is below:

http://seekingalpha.com/article/225...-getting-ready-to-rock-in-the-lone-star-state


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## tradernor (8 June 2014)

*Re: LNR - LONESTAR rises after the upgrade to OTCQX*



raimop said:


> It seem to me that Aussie oil and gas exploration companies that are active in the USA benefit from being listed on US  or Canadian exchanges as it gives them far more exposure. A point in case is Aurora Oil & Gas. Its only asset was leases in the Eagle Ford Shale area. It was listed on the ASX and the Toronto Exchange. It was recently taken over by Baytex a Canadian company who paid a substantial premium for it.
> 
> All IMHO and DYOR.
> I hold




Agree, it helps a lot. The only difference here is that LNR is the operator of its properties while Aurora was not the operator. Marathon was the operator for Aurora's assets in the Eagle Ford.


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## Sharecropper (9 June 2014)

Hi all - I'm new to Lonestar, which looks like an exciting play, but not to other companies in Eagle Ford and the surrounding area.

I just read this and found it very interesting: http://www.naturalgasintel.com/articles/98627-eagle-ford-to-rival-north-slope-output-at-its-peak-says-wood-mackenzie

Regards,

Sharecropper.


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## raimop (10 June 2014)

*Re: LNR - LONESTAR and SeekingAlpha Bullish Article Today*



tradernor said:


> The best financial publication in the US, SeekingAlpha, launched a very bullish article today about Lonestar Resources.
> 
> The author, "Value Digger", who has a proven track record (his previous call yielded 120% in 3 weeks), explains why LNR is grossly undervalued at $0.35 (US listing).
> 
> ...




Hi TRADERNOR,
thanks for posting the article. It hasn't gone unnoticed with LNR up 8.5 cents today


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## tradernor (14 June 2014)

Hey raimop, check out another analysis from SEEKING ALPHA again that compares Lonestar to its neighbors at the Eagle Ford shale:


http://seekingalpha.com/article/226...igh-key-multiples-continue-going-hand-in-hand


This excellent write up is also posted today at Yahoo finance/headlines/HK ticker or GDP or CWEI or CRZO.

All these four companies drill where Lonestar drills.


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## tradernor (14 June 2014)

Forget GDP, it disappeared from GDP's Yahoo headlines, but it remains at HK, CRZO, CWEI.
Yahoo's technical glitches bother me.


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## tradernor (19 June 2014)

This time another author from SeekingAlpha posts another bullish article about LONESTAR. The link is below and the article is also posted at Torchlight Resources (TRCH) headlines at Yahoo Finance.



http://seekingalpha.com/article/227...compared-to-other-small-growing-oil-companies



Hopefully, the Australians will see where LNR's peers currently trade, and they will realize finally that LNR is a strong buy at $0.4 or A$0.43 per share.


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## Joe Blow (19 June 2014)

tradernor said:


> Hopefully, the Australians will see where LNR's peers currently trade, and they will realize finally that LNR is a strong buy at $0.4 or A$0.43 per share.




Tradernor, you are welcome to make a case for LNR being undervalued using peer analysis, but please don't recommend any stock as a buy or sell to others, as that may constitute unlicensed financial advice.


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## tradernor (19 June 2014)

I did not know it Mr Blow. Sure, I will not say anything next time.
I just expressed my personal opinion.

By the way, Lonestar's new presentation was out just 2 hours ago. 
Good to see that we drill so close to EOG Resources, Chesapeake and other major players of the EF.
Here it is:


http://static.squarespace.com/stati...nestar Resources Presentation - June 2014.pdf


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## tradernor (20 June 2014)

New article from Seeking Alpha website is out this afternoon (in the US).

It compares several junior producers with US-based operations and LNR is the cheapest one at $0.4 (US) or A$0.44 (Sydney).

The link is below:


http://seekingalpha.com/article/227...n-fly-high-like-an-eagle-over-the-next-months


This article is also posted at Yahoo Finance/headlines/ticker AMZG

AMZG stands for American Eagle Energy Corporation, a junior oil-weighted producer in North Dakota.


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## tradernor (20 June 2014)

It is also posted at Google Finance under the ticker AMZG and LNREF.


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## tradernor (21 June 2014)

New article from SeekingAlpha that compares LNR to another group of junior oil-weighted producers (TRCH, AXAS etc.) 

LNR is the cheapest one once again:


http://seekingalpha.com/article/227...compared-to-other-small-growing-oil-companies


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## raimop (30 June 2014)

tradernor said:


> New article from SeekingAlpha that compares LNR to another group of junior oil-weighted producers (TRCH, AXAS etc.)
> 
> LNR is the cheapest one once again:
> 
> ...




Hey Tradernor again thanks for posting these articles. I wasn't aware of SA until you started posting articles from there. The articles are well researched. I am using it more as a research tool. Brought LNR at the start of the month so up 42% for the month. Got to be happy with that


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## Echidna50 (2 July 2014)

*Re: LNR - Lonestar Resources NEW article/analysis*

A new article about Lonestar is available in US based financial site "Seeking Alpha": 

http://seekingalpha.com/article/229...rrationally-undervalued-compared-to-its-peers


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## tradernor (3 July 2014)

Thanx Ehidna. Just read it. Another great write up.


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## raimop (22 July 2014)

These extracts are from a recent interview with LNR CEO Frank Bracken III.
The complete interview can be found at www.ogfj.com
Just enter "lonestar Resources" in the search box

OGFJ: Talk to us about your recent listing and any related plans for a capital raise.

Bracken: On June 2, our OTCQX listing became effective. For us, it's really straightforward: our fiduciary duty to our equity holder is to create the broadest possible market for our shares. It just made sense to us that we linked our share price to the US market because that's where the bulk of our peer companies trade. As of this interview, we're only in day six of trading, but the results have been humbling. I think our stock is up 50% since the listing took hold. With the listing there's now the potential to raise money in both the US and Australia. Right now we just completed a $220 million senior unsecured note deal with Jefferies and Wells Fargo in the states. That transaction has given us an undrawn line of credit that totals $109 million. We feel like we've got all the capital we need right now.

OGFJ: Finally, what might Lonestar look like in 5 years?

Bracken: Our primary mission is to build an asset of consequence in the Eagle Ford. In my view, optimally, there would be a 40,000-50,000 acre position. We think the well results and the M&A activity that has been perpetually reemphasized through improvements in well quality and the constant purchase by non-Eagle Ford operators of Eagle Ford assets or Eagle Ford companies is a validator to our philosophy. I think our goal is to build an asset of consequence so that at some point in time, someone who has a different sense of value comes along and takes the company out. We're in this to make money for our shareholders; I'm not out to build the next Exxon. We'll prosecute the strategy as long as it's accretive to our equity holders. If somebody comes along that decides we're worth more to them than we are to the stock market, then we'll sell, but I see our development cycle taking 3 to 4 years before the company would ultimately be monetized.

OGFJ: Thank you very much for your time. 

Well there's a plan in place.
I hold


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## raimop (4 August 2014)

Lonestar Resources announced today on the ASX that it has reached a definitive agreement to acquire approximately 5,200 net mineral acres in Brazos County, Texas at a cost of $2,500 per net 
mineral acre. This acreage, together with transactions announced in the Company’s June 2014 Quarterly Report, add a total of 8,351 gross / 7,227 net acres in Lonestar’s existing areas of focus in the Eagle Ford Shale Trend. *These transactions expand Lonestar’s leasehold by 31% to 34,215 gross / 30,306 net acres in the Eagle Ford Shale play *

So the plan to accumulate between 40,000 - 50.000 acres takes another step.

I HOLD


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## tradernor (12 September 2014)

Thanks raimop. Check this out too. 

LNR trades 4.5 times its 2014 EBITDA at the current price of A$0.45 !!

LNR currently (at A$0.45) has enterprise value at US$525 million (including the debt of course) and 2014 EBITDA is $115 million, according to the average company's estimate.

And the peer group:


Several small caps from different plays across the U.S.:

Small Cap Oil and Gas Valuation

Operator	                                Play       EV/EBITDA

Triangle Pet. (NYSEMKT:TPLM)	Bakken	10.09
Abraxas (NASDAQ:AXAS)	       Bakken/EF	13.84
Matador (NYSE:MTDR)	                EF	        9.76
Gulfport (NASDAQ:GPOR)	       Utica	        21.22
Bonanza Creek (NYSE:BCEI)	     Niobrara	9.07
Synergy (NYSEMKT:SYRG)	     Niobrara	18.12
Rex Energy (NASDAQ:REXX)	  Marcellus/Utica	9.27
PDC Energy (NASDAQDCE)	   Niobrara/Utica	12.72
Gastar (NYSEMKT:GST)	      Marcellus/Hunton	10.51
Goodrich (NYSE:GDP)	              EF/TMS  	16.11
Carrizo (NASDAQ:CRZO)	EF/Niobrara         10.69


Although this data does vary, it provides an idea of how these operators compare. I didn't add all of the plays involved but tried to highlight the main areas of production. Below are small cap Midland Basin pure plays also compared on an EV/EBITDA basis:


Midland Basin      Small Cap Valuation

Operator	                            EV/EBITDA

Diamondback (NASDAQ:FANG)	18.3
Athlon (NYSE:ATHL)	                21.77
Parsley (NYSEE)	                19.07
RSP Permian (NYSE:RSPP)	        18.32





The full article from SEEKINGALPHA:


http://seekingalpha.com/article/247...-permian-ipo-growing-88-percent-in-2015?ifp=0


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## tradernor (12 September 2014)

The good thing is that the CEO will present the company to the funds and institutions very soon, so the awareness will rise dramatically and the comparisons are inevitable.


On Wednesday, September 10, 2014 2:28 PM, Frank Bracken <fbracken@lonestarresources.com> wrote:

Hi XXXXXX,

We attended and spoke at the Good Oil Conference.
Additionally, we are scheduled to speak at the Johnson Rice Energy Conference at the end of this month and the Canaccord Genuity Global Energy Conference in New York in mid-October 2014.

Regards,
Frank


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## tradernor (13 September 2014)

The CEO also presented the company at the recent RIU Australasia conference.


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## tradernor (13 September 2014)

According to the company's presentation, LNR is also the only energy stock with 65% insiders ownership. So the shareholders are fully aligned with the insiders.


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## tradernor (13 September 2014)

Major Shareholders

Stake:

EWPO/EH/EHL (ECOFIN and subsidiaries)
58.83%

Lonestar Management
5.9%

Wyllie Group Pty Ltd (It sold recently to other Australian funds)
5.3%

Adam Smith Asset Management
1.2%

Colonial First State Global AM
1.0%

Industry Funds Management
1.0%


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## tradernor (14 September 2014)

raimop, I am looking forward to reading their results from Brazos County where they drill the sweet spot right next to Apache (AP), Halcon (HK) etc.


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## tradernor (14 September 2014)

http://static.squarespace.com/stati...star Resources Presentation - August 2014.pdf


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## raimop (25 September 2014)

Hi Tradernor, hope you  are well.
I'm a bit concerned with the drop in SP this month.
Started the month at 50 cents now trading at 38 cents that's a drop of 24%
There have been no ASX announcements so assume everything is going normally.
Do you have any thoughts?
Thanks


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## pixel (25 September 2014)

Going purely by precedent, I'm looking for support at current levels:





The upper trend line started in mid-January and followed the 1-year EMA; both marking holding support in May.
Throughout May, the green "W" indicators kept popping up; they're simple markers that I wrote as visual alerts ("W"arnings) of momentum likely to have bottomed. The first one like those returned a few days ago.
No guarantee, merely an alert to watch mode closely and prepare a buy order if I wish to trade this stock.

Zooming in further, a close-up suggests odds for a turn may be increased at 40c; should today's candle finish as a small-range Doji cross, it would appear even more Bullish to me.


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## rb250660 (25 September 2014)

I'm holding at around today's closing price. Let's wait n see.


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## pixel (26 September 2014)

Jinxed it, I have 

Given the general Market jitters leading to e big fall generally, LNR's drop should hardly come as a surprise.
Where I still remain optimistic: Today's trading range may have fallen through the (yellow) 1-year EMA, but it's poised right on top of an old rising support line. If that holds and we end up with a bottom reversal Doji candle, we can still expect a positive turnaround early next week,


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## rb250660 (30 September 2014)

pixel said:


> we can still expect a positive turnaround early next week




You called it pixel. I was in at 0.365 and out this morning at 0.395

NG futures up too.


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## raimop (1 October 2014)

tradernor said:


> raimop, I am looking forward to reading their results from Brazos County where they drill the sweet spot right next to Apache (AP), Halcon (HK) etc.




Hey Tradenor, this announcement was released this morning. All good, on the way to achieving yearly targets.

Lonestar Resources, Ltd. (ASX: LNR, OTCQX: LNREF) is pleased to provide an update on the Company’s initial successes in its drilling and completion activities in the Eastern Eagle Ford Shale play, including initial production tests from its first two completions which average 738 barrels of oil equivalent per day (95% crude oil and NGL’s). These results provide confidence in the Company’s forecasted 2014 exit rate of 6,500 to 7,000 BOEPD, and suggest increases in proved reserves from the Eastern Eagle Ford Shale trend at year‐end 2014. 

As budgeted, LNR has drilled and completed five horizontal wells in Brazos and Burleson Counties
during the third quarter of 2014. The first two of these wells have been drilled, completed, fracture stimulated and were placed on flowback on September 23rd. Details of their completion are as follows:

• Ranger Dansby #A4H‐ LNR drilled its first lateral in the Eastern Eagle Ford in 23 days. LNR
perforated a 5,619‐foot interval and pumped 7.9 million pounds of proppant across 21 stages (1,404 lbs/foot). The most current rate from the #A4H was 674 bopd and 413 Mcfgpd on a 17/64” choke, equating to a processed three‐stream rate of 778 BOEPD. This rate is being achieved at a 40% oil cut, with only 4% of the frac load recovered. LNR has a 100% WI and a 78.1% NRI in the well, which was classified as Possible Undeveloped in LNR’s reserve report at year‐end 2013.

• Ranger Dansby #B1H‐ LNR drilled its second lateral in the Eastern Eagle Ford in 12 days. LNR
perforated a 5,406‐foot interval and pumped 8.1 million pounds of proppant across 21 stages (1,495 lbs/foot). The most current rate from the #B1H was 600 bopd and 387 Mcfgpd on a 17/64” choke, equating to a processed three‐stream rate of 698 BOEPD. This rate is being achieved at a 36% oil cut, with only 4% of the frac load recovered. LNR has a 100% WI and a 78.3% NRI in the well, which was classified as Possible Undeveloped in LNR's reserve report at year‐end 2013.

LNR currently has three wells awaiting fracture stimulation in the Eastern Eagle Ford. LNR owns a
82.3% WI and a 62.0% NRI in the Dunn A Unit #1H and Dunn A Unit #2H, which it has cased to total depth of 14,346 feet and 14,338 feet, respectively, and expects to begin fracture stimulation operations in the next 7 days. These wells were classified as Probable Undeveloped in LNR’s reserve report at year‐end 2013. LNR has also completed the Scasta #3H well, which was its only Proved Undeveloped location in its 2014 capital program LNR owns a 100% WI and a 79.4% NRI in the Scasta #3H well, which it has cased to a total depth of 13,060 feet, and plans to fracture stimulate immediately after it completes operations on the Dunn Unit wells. All three
of these wells are expected to contribute to production in November, 2014. 

Frank D. Bracken, III, Lonestar’s Managing Director and Chief Executive Officer commented, “We are extremely pleased with our initial results in the Eastern Eagle Ford. We have delivered excellent initial production results from our first two producers, and currently expect to have three additional completions onstream by November, 2014. It is noteworthy that only one of Lonestar’s five completions in the Eastern Eagle Ford Shale trend was designated as Proved Undeveloped in our reserve report at year‐end 2013. Accordingly, we believe that the 2014 Eastern Eagle Ford drilling program should have positive implications for LNR’s Proved Reserves base at year‐end 2014. Furthermore, I am extremely pleased with the considerable strides made by our
technical team in terms of optimizing our geo‐steering processes, our drilling techniques, and our fracture stimulation procedures, and I believe that the Eagle Ford Shale wells that we will drill in 2015 will benefit significantly from what we have learned from our initial program.”

I HOLD


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## tradernor (15 November 2014)

A very bullish and factual article from Seeking Alpha was out this morning:


http://seekingalpha.com/article/2682715-lonestar-resources-is-hilariously-undervalued-right-now


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## ukulele (30 December 2014)

Is there any impending news for LNR? 

A very bullish candle with decent volume on 15/12/14. Looks like (in my very amateur view) a base is being established. And so far today around 1mil volume on the first hour.


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## rainbowji (7 July 2015)

I have been invested in this share for about 80,000 now. It seems like a dead sea now.


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## ukulele (7 July 2015)

Yes I was stopped out a while back. With the recent retreating oil prices I remain out for sure.


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## System (8 July 2016)

On July 7th, 2016, Lonestar Resources Limited (LNR) was removed from the ASX's official list at the request of the Company, in accordance with Listing Rule 17.11.


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