Repeat of Moles great post29 Oct 2018 19:54
**Hope you don't mind me re-posting this Mr Mole ? But its too good not to repeat**
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Now had time to have a careful read. So lets take each para at a time and pick out the key bits.
Para 1: The date is interesting. Signed on 26th Oct. I think the NDA was signed 26th August but later the MOU expires 26th September 2019. You would have thought a 1 year time! The term mutual cooperation is used. Mutual implies a bit more than just buying some services. The MOU is one result of the discussions with industry majors but need not be the only outcome of such discussions.
Para 2: Aim and scope is laid out. Collaborate to improve efficiency of operations, enhance service capacity and capabilities, and COMMENCE in-field drilling and intervention campaign Note this last comment COMMENCE. Also looking at the list of services that could be deployed which is a full range mix of project management, technical and analysis.
Para 3: Initial phasing is Phase 1 field program of reworked wells in taribani with objective to increase oil production. Phase 2 Wider Taribani full field development. Phase 3 Future projects - including interestingly "gas monetisation". When I originally read that I thought Mtsare but maybe its the associated gas?
Para 4: we are now working towards a Definitive agreement to frame the work outlined in para 2 and 3. The commercial models sound very like the info you would use in a CPR. The cooperation will deliver the BEST of BHGE's expertise, knowledge, know-how and services. Funding from FRR side mentioned for first time as by "sharing of its oil and gas production" (like what was already announced for NIKO!).
Para 5: Reaffirms the term mutual cooperation and that the company looking to cede profit share of production in return for Baker Hughes deploying expertise and potentially kit.
So all in all my view not changed from this morning. In the near term the 2018 campaign carries on phase 1 and develops into the full field development of taribani phase 2 probably once they know what zone 25 is like at Niko. Further out there are other potential projects. The proved up assets in a JV structure do not preclude deals being done at any time. Very much the sort of deal I was expecting.
As a note notice the MOU is with FEGL the subsidiary that holds the block 12 license. That would have been the subsidiary Outrider might have been eyeing up. Notice the dove tailing of the YA settlement into the timeline as well.
This should leave the company with a plan to increase revenue over the next 12 months (funded by profit share) to continue the company restructure and stabilisation of balance sheet and 100% of block retained.
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