Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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The key for an exploration company to be successfull is to be able to drill as much wells as possible with as little dilution as possible, once the first oil is hit its multiples and all funds issues are solved.
What eco did is raising a small amount at a great price that will provide it the opportunity to take part of the farm out and get 2-3 wells carry, thats what you want!
Another thing:
You wrote: "Azinem was bought for 24m$, todays transaction give eco's 20% a 36m$ valuation!"
You can not take a price that you agreed to pay, as a benchmark for something that you already own. This is not "third party validation", its yourself agreeing to pay that price.
By the same way, if you agreed to pay US$ 200 mm for an additional 6.5% of the block, you would say that our previous 20% was valued at....US$ 615 mm????
Maby you need to read my posts again before answering them.
I was not talking about the fundraise, I was talking about acquisition of an additional 6.5% interest in block 3B/4B.
You got it all wrong my friend, eco just prevented more dilution, two wells would cost them 35m$ which, if gazania failed, would dilute us to the bone at a 15p price, instead for 12m$ at 30p eco is prepered for a farm out for 2-4 wells.
Eco was in a strong position negotiating this deal and got all the info of whats on offer and surely got a better price for the benefit of the jv.
Now instead of having a potential 1 well next year with no funds, eco will have a major operating the block, 3 wells campaign fully carried or mostly carried.
Some posters here think that the deal is a "steal", because we are valuing the highly promising 3B/4B block at just US$ 153 mm (US$ 10 mm / 6.5%).
But, by doing that, they are just looking at one side of the transaction.
In order to acquire that 6.5% interest, we current shareholders are giving away (through dilution) c. 9% of all our assets for just US$ 10 mm, including the upcoming fully funded Gazania drilling, with a relatively high chance of success, and c. 200 mm barrels of prospective resources net to us.
I insist that this is not in the best interest of current shareholders.
Regards
Guys, stop speculating, i talked with gil, this deal is brilliant!
No farm out can be made without a green light by eco and aoi, eco wants to be part of a f.o but needed more interest to remain with 15% post f.o.
The jv decided to make this deal to solve all issues.
A major will step in, eco will farm out 10.5% (40%) for atleast 2 wells carry.
It doesnt get any better then that.
The seismic is still in work so i guess it will take some time.
My take is that a major will soon take a large slice direct from Ricocure and ECO will retain its 26.5%.
Why would a farm in be imminent. Surely the vendor of the sake sold to ECO would have know if this was the case and if so why on earth would they be sellers.
Seems to me another roll of the dice by Gil. Let's face it he has years of form at this.
Hopefully Gil will appear in a q & a session.
Wonder what the supposed oil sage Malcy makes of it all!
As I said before, the "acquisition price" for current shareholders was the losing of c. 9% of all our assets (including our original 20% interest of block 3B/4B), in exchange for just 6.25% interest of block 3B/4B.
I don´t think that was in the best interest for us.
I´m going to write management about that (of course, I don´t expect a repply).
Regards
This deal is a preparation for a farm out, 12m paid in orde to farm out 40% to a major for much more though this price tag alone keeps eco with 15% and 2 wells carry.
Its all about the big picture.
Big dilution?
Azinem was bought for 24m$, todays transaction give eco's 20% a 36m$ valuation!
Thats only for block 3b/4b.
That deal was a steal!
Gazania is our nearest project to drill...and with the better chance of success...and we current shareholders have lost c. 9% of Gazania too, in order to acquire just 6.5% of block 3B/4B.
Regards
Meanwhile we await actual confirmation Orinduik will get a drill next year, or whether Tullow kick the can down the road.
A bird in the hand and all that.
ECO must be vey confident about what the updated seismic will show - and that the big operator is inbound to make it happen. Please don’t let it be Tullow..!
We closed Friday trading session with a market cap of CAD CAD 137.75 mm, equivalent to US 107 mm.
We are going to pay US$ 10 mm to acquire just a 6.5% interest in block 3B/4B, by issuing shares, and by paying some cash that we subsequently needed to raise.
We as shareholders have lost c. 9% of everything else we have (Orinduik, Gazania, original 20% interest in block 3B/4B, etc), just to acquire a 6.5% interest in block 3B/4B.
I don´t think that the 6.5% additional interest in block 3B/4B has a greater value than c.9% of anything else we have (including the original 20% interest in block 3B/4B).
Somebody is going to tell me that if we make a big discovery in block 3B7/4B, this will prove to be a great move. But we have similar (or even better) chances of making a discovery in each of the blocks I mencioned (especially Gazania).
This deal is not in the best interest of shareholders, in my oppinion.
Regards