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Almost certainly the case that when a JV eventually comes it will be neither Premier, Conoco or Oil Search given they look like “Likely Candidates.”
On the sentiment side a name like Conoco May have a bigger impact. As I understand it the 2016 Eon deal made sense from a debt perspective as the production gave them more headroom on their existing debt related to their covenants (similar to the EnQuest Magnus deal). Although I am delving into an area that others may know better.
If Premier have the money to fund they would likely be a good match. Having worked with the likes of them and EnQuest these companies are certainly more nimble than the supermajors and if the moneys there things would likely move faster. This ties in with remarks from 88e on their recent podcast.
And Otto would probably be very supportive too! Production from Talitha from the Dalton Highway would give them an unexpected boost in cashflow.
In the end there are too many possibilities to work out what’s going to happen.
My money is now on Conoco after they sold $1.4bn of Aussie assets last week with the funds to be reinvested back in the US.
Well that might explain Bob Rosenthal’s trip to London.
Also it’s likely that Pantheon rather than 88 Energy have the useful seismic on much of the Ice Wine project where it abuts the Pantheon ground.
But a JV with Pantheon is likely to require $100m outlay which seems higher than PMO’s wallet until those farm outs are completed.
That makes sense David, I thought you were being a wee bit optimistic.
I would tend to agree with you on Premier, I would prefer the bidder to be someone with easier access to finance. Premier’s main priority is to strengthen the balance sheet and future investment will likely depend on Zuma/Sea lions sale and farmout.
Rabito the $40-$50m is just pipeline capex not the whole thing.
I am guessing that if it needs 50 wells at $20m ish then add in some fixed costs the total will be $1bn.
PMO with a market cap of £600m are too small to JV with Pantheon given all their other commitments. Not sure they are even big enough for 88. They will probably look to add value and then bring in further partners which will be slow.
Just my thoughts.
David, Alkaid CAPEX will be significantly more than $40-$50million I would have have thought. Where did you get that figure from?
Premier farming into us could also be a risk to 88e.
The biggest risk on Charlie 1 is the infrastructure required to be in position before any oil can be pumped.
At Alkaid post the test it’s assumed the oil is there to be pumped, at Charlie 1 that is not yet proven but pretty likely based on the old BP well.
So what’s the difference? Well the Charlie will need between $750m and $1250m of pipeline capex that needs to be planned, financed and risked. Alkaid assuming It flies as expected will need $40 to $50m of Capex post trial runs using trucks.
So the Premier 88 asset may be just as good but it comes with a big capex hurdle. Alkaid on the other hand Capex wise is pocket change for the oil business.
Nigeoil, thanks for getting back. From my side it would appear that there is much more risk with 88e on what appears to be an all or nothing drill.
Whilst Alkaid is by no way a home run, having flowed oil it is surely a safer bet and in a better position. Furthermore the farmout should allow Talitha to be drilled also. Therefore we hopefully should have more than one throw if the dice.
@DB - nothing wrong with that, weeds out the tyre kickers.
As I understand it the last time that GB allowed “Independent experts” to look at their data re bank finance the day after their exclusivity period ended those experts staked all the ground to GB’s southern border as 88 Energy.
That might explain part of the reluctance to make it easy for others to “Acquire” their IP in a questionable manner.
That concern over data security is also clearly seen as they are making all the potential JV partners travel to Houston to see the data with no one getting electronic access. That no doubt has added weeks to the JV timeline.
Rabito thanks very much, I suppose the bottom line short term is will the F/O affect share price significantly...I want to be in at the bottom but am awaiting a result on a drill elsewhere!! decisions decisions. But It Does finally look like Panr have the people to get the oil out of the ground.
Djm1, the board are still targeting a winter drill which would mean the farm out will likely be this side of Xmas. However I think this is an ambitious target and is in the ‘difficult but possible’ category.
I personally don’t think it’s a big deal if we miss the winter drill as I believe the 3 producer drills are not dependant on winter drilling.
If you check my earlier posts I have tried to compare our farm out to 88e. They essentially have a similar drill to Talitha but targeting less OIP in a worst location. Furthermore the eSeis deal in my opinion offers significant 3rd party endorsement. For a relatively small company to wager $2M on Talitha alone is a great vote of confidence.
The board have repeatedly stated they are looking for a four drill carry plus material cash payment and repeatedly highlight the scale of sunk costs to date, this is obviously deliberate.
Of course one big difference from 88e is we have flowed oil from Alkaid and the board believe this to be commercial. The OIP at Alkaid/Phecda is double that of the 88e portion of the forthcoming drill. Given we have Texas and possible unconventional I do question why anyone would invest in 88e over Pantheon. If Nigoil is reading this I would love to hear his thoughts on this.
Hope this helps.
Hi all, i got out of Panr last year after holding from 133p, i couldnt takle the pain and felt i could do almost anything with the money and get some of my losses back. I have been watching the Alaska situation develop and am wondering regards timing of the farm out. 88e took a long time and had no share price benefit overall. Will the same be said for PANR when a deal comes, is it realistically likely to happen before Christmas and will PANR be able to negotiate a large cash injection towards sunk costs? I would love it if this came good but cautious as its been one false dawn after the next. Thanks for any opinions offered.