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The deal is what I expected not the one I had hoped for. We are in a very difficult position until we strike oil - at least we have plenty of cash while we sit and wait :)
I just can’t understand some of the figures here. If the drill is successful then premier has the option of 50% of areas B or C for $15m! Really? $15m for 50% ??
We have got money to pursue other projects and now that we have a firmed up farm out deal we can be bold in using that money.
Couple of things:
1. We are drilling again. Funded. Q1 2020. You need to drill to get the oil out and the SP follows.
2. We are keeping plenty of acreage.
3. The Farm Out was successfully executed. The hedge was against it not going through.
Sounds like a good deal to move this forward.
I feel mixed emotions.
I am pleased its finally done and published, and I am pleased that our acreage is to be drilled to try and find commercial oil.
But somehow I am underwhelmed by the deal as it has been outlined. It seems PO are simply putting a toe in our water first without a real plan unless they find something. Prudent approach by them no doubt but I hope we have the cash to play our part without asking for more from all of us in 2020.
Bang on Moneyhawk
Also check out premiers half year results ...35% more cash than expected
WHY has this taken so long to end up with a small deal .
Some money up front so we can pursue other projects (unconventional) would have been good
Lovely bit of jam
So now we know, the farmout is just for part of the acreage and so far we know that we've split the acreage into 3 - Areas A, B and C, and we've farmed out area A which Premier have estimated to be 1B barrels based on 3D and the historic discovery.
Don't know what this means in terms of acreage amount, but assume that we still have the vast majority of acreage overall.
Fully funded to drill this winter, and scope for other areas to be farmed out.
Its a good deal imo, not the great deal many were hoping for, but still a good deal. We don't have to raise to pay for our share of drilling, and we haven't given everything away to do it.
What a joke
Burgundy, oh yes you’re probably right. Still an assumption though.
All that time and it looks as bog standard as it can be. Feel a little let down. Hope the market likes it more than I do right now
Also, no cash up front to progress the unconventional.
Have to say, I think this is very disappointing, been in this for years now, and not the announcement I expected.
Burgundy
Tier 1? Transformational? Feeling a bit underwhelmed if I’m honest.
Does it not state 30% working interest retained?
With Premier getting 60%, where’s the other 10%?
Well that was an anticlimax
40% retained, better than most deals of this sort.
Wouldn’t call that “transformational” imo
Under the terms of the SPA, Premier will pay the full costs of an appraisal well up to a total of US$23 million to test the reservoir deliverability of the Malguk-1 discovery. The well will be drilled and tested in Q1 2020 with rig options having already been identified and contracting negotiations underway. On successful completion of the work programme, Premier will have the option to assume operatorship.
Alaska
Premier has signed a Sale and Purchase Agreement with 88 Energy and Burgundy Xploration LLC to farm-in for a 60 per cent interest in Area A of their conventional Project Icewine acreage in the proven Alaska North Slope basin. This acreage lies close to the Trans-Alaska Pipeline and the Dalton Highway. The transaction provides Premier with a cost effective entry point into an emerging play, following recent advances in drilling and completion techniques, within a proven oil province and one which has the potential to deliver significant organic growth opportunities for the Group.
Free carry, but no cash up front? I know we have plenty of cash in the bank but cash up front would have been good
premier oil it is then