I agree. Also just to add that a production asset would mean having to take on a lot of debt. A lot of capital has to be invested upfront and there is a lot of risk involved. To give an example Afren racked so much bond debt as it kept buying PPE and production assets. Eventually its Ebok facility got flooded and revenue was cut. cashflow crisis on top of an endless list of disastrous events with Barda Rash oilfields being downgraded leading to massive impairments. etc to cut a long story short its not worth CHAR investing in producing assets. there is nothing wrong with its current business model whereby it primarily produces it cash from farm out. There is no debt and there is plenty of cash. i know its a boring cliche but "if its not broken don't fix it." I like this business model. its a lot less risk than actually drilling the oil themselves. its much easier to have a partner to drill the oil and not have to worry about racking up unnecessary debts. I certainly hope CHAR steer clear of racking up debt on production assets. I rather them carry on with their current business model.
Now doubled on equitation of a producing asset - someone will soon be asking why them and not us - after all we have committed $7m to the fund which was once sold to us as cash for and exciting new venture ! My worry is we will buy more acreage but with no production attached - for me it's the worst outcome for Chariot - more costs more need to farm- out in a depressed market and nothing to offset - SQZ have proved what the market is looking for and it's not a new area to sink cash into MR
Agree So its stick in bottom drawer and wait - and maybe buy in when. Cheaper if you still believe in the acreage
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