By way of example, Europa has now partnered with Kosmos on its two licences in the South Porcupine Basin. The American explorer and discoverer of Ghana’s giant Jubilee has committed to a quarter of a billion dollar, two well exploration programme and appears to be fast tracking the licences.
A look at the group’s most recent presentation reveals Kosmos hopes to drill a first well off the coast of Ireland in 2015. Last week we heard it completed 1,500 square kilometres of 3D seismic, which will help de-risk the play; narrowing the chance of success down to one-in-five from one-in-ten.
A back of envelope calculation reveals this de-risking process will have the most material impact on its partner Europa and the value of its 15 per cent stake in the licences. Analysts reckon conservatively, Ireland will be worth around 20p a share to Europa once if the seismic raises the chance of success in the way predicted. This is more than double the company’s current share price. A successful well will send the stock stratospheric.
Chatting to executives involved in Ireland, they point out that all the existing licences there have been sewn up, leaving some of the larger explorer’s interest in the area with no other option than to buy their way in. That would likely make Petrel, Europa and Antrim – with a combined market cap of just £37million – vulnerable to bids. Meanwhile, companies such as Kosmos, that have taken large positions in Ireland, are expected to farm down to mitigate their costs. And this process should give a very tangible valuation of the assets held by the smaller companies involved in Ireland.
On appointment, Mr Mackay will be granted options, expiring after ten years from the date of grant, over 5,000,000 ordinary shares with an exercise price of 13p. The share options will vest in five equal tranches when the share price of the Company has been at or above 25 pence, 35 pence, 45 pence, 50 pence and 60 pence respectively for a period of 30 consecutive trading days. Prior to appointment, Mr Mackay has also purchased 455,615 ordinary shares of the Company, representing 0.35% of the Company's issued share capital.
Director have also been purchasing stock on a regular basis so this should give Pi's some hope here
I agree, to a certain extent that the Irish progress is out of our hands but there is no way we would be kept out of being fully appraised on any developments, and IMO the progress we have made so far is extremely promising 2016 drill is no bad at all, we should be happy to have Kosmos as our partner being experienced/ financial capable and proved to be successful with a drill..dont forget we are serious small cap (only £12m market cap) - Kosmos is our best chance of a serious multi bagger with a successful Irish drill! What I particularily like about EOG though is the company isnt completely leveraged agaist the Irish play - with our onshore production in the UK and hopefully some farm outs coming in France (not to mention some remote chance of capatilising on the Shale gas) we have a lots of diversity with de-risked projects and prospects to keep the share price ticking along nicely until further news on Ireland. Don't forget that management are also on the look out for new opportunities, which could be interesting - IMO doing a good job....would be nice to get to the target of top quartile AIM listed company one day.
In all fairness Kosmos are managing the Irish sea asset (and paying for its development) now which must make it more difficult for HM to issue stand alone punchy detailed RNS's with any degree of accuracy, hence the somewhat conservative stance. I'm sure that EOG will be kept fully appraised of any developments, and as we have already seen Kosmos are not slow to execute their WIP. We are very fortunate to be partnered with Kosmos and the work that they have done so far (IMO). All we have to do now is sit back and patiently wait for the results which potentially could increase EOG shareholder value by x 20.
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