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As many of you are probably familiar with, the timelines are public in advance and firmly regulated when it comes to the environment and the permit application for drilling for oil in South Africa. Therefore, our CEO could say that the deal with Total Energy would be completed in August.

Other timelines that are not dependent on these rigidly regulated frameworks may of course vary. But I notice that the CEO chooses to italicize the following text in the quarterly report today:

"We look forward to providing updates on material developments to all our stakeholders over the coming months."

Our CEO is bound by confidentiality during the negotiations.

In another presentation, he was quick to point out that he did not want to go into how much oil might be on our side. In this presentation, he was careful to point out that the unitization framework was clear in Guyana.

To me, it seems most important to choose the partner who not only drills a hole, but also commits to a serious attempt to start up Jethro, which according to the CEO has 1 billion barrels in place.

With the right partner, a signed agreement can provide substantial leverage before the drilling campaign next year.

1. ECO goes down 1% gross in 3B/4B, but gets 16% bigger share of the remaining 5.25% than they had of the 6.25%? So, net in 3b/4b? :-)

2. Quite obviously, AOI values ​​1% in 3B/4B so highly that they want to do this deal now, at a low share price in ECO where, for example, ECO's management "notes" that Hammerhaed is to be started up.

Reasonably, AOI has other business plans that cause them to rush this deal.

3. Ghana, Namibia and the new block in the Orange Basin overnight became worth 16% more, not in absolute terms on today's date, but for every new increase in value that happens there in the future

Correction:

Several parties must find a comparative way forward here that does not just end in a deal on drilling light oil but a possible start of production under certain conditions of the heavy oil - and an extended opportunity for co-production at Hammerhead. All in an early state, but a need for coming to a decision/deal.

I still see the environmental application to start up Hammerhead as part of the negotiation game for our concession on the part of Exxon.

Reasonably, our CEO proposes to include the value of production from our two heavy oil finds. The value of this for Exxon or for another partner and what percentages it should give in our concession is difficult without appraisals being made. Several parties must find a comparative way forward here that does not just end in a deal on a possible start of production under certain conditions - and an extended opportunity for co-production at Hammerhaed.

There are many variables in the air at the same time in these negotiations. Once the result is presented, we get a new qualitative level and a different pace.

Please, make a perspective shift: See the matter e x p o s t the environmental application made to start up Hammerhead. We do not need to speculate on the reasons why we now have 100% of the concession, we have. Still the fact remains that after the activation of Hammerhead our concession has increased in possible value. See my post below.

Redwineday, your post is written as the environment application to start Hammerhead does not exist. But it does.

Sorry.

The short summary of the matter is that the environmental application regarding Hammerhead is driving the price of our concession.

In the negotiation situation that eco is in with the parties interested in farming into our concession, it is interesting to note the following:

Exxon has a card that is interesting, namely Hammerhead. The stakeholders who do not have the corresponding cards to play can, however, give Eco a larger share of the block and still refer to the unification that will then follow from an exploited Hammerhead. If it follows without Eco binding Exxon to this in an agreement. Eco can, just like in 3b/4b, enter into an agreement on a unification that carries them all the way to production - or not. It is a choice. The latter may result in a better unification agreement now, but a weaker share of light oil discoveries in other parts of the concession than if you settle with another party.

Without a doubt, it is interesting that the hammerhead project is there with its environmental application, it drives up the price/percentage that Eco can keep in our block, all else being equal. If we go with Exxon, we already have something that can grow more with our own, already found, heavy oil. I find it important to secure drilling for light oil in such a deal.

As someone pointed out, the timing of the publication of the environmental application for the start of Hammerhead is of interest. Reasonably, it is included as part of a negotiation game about our concession. A similar application for Hammerhead was submitted and delayed during the covid 19 period. I therefore believe that the lesson learned from the negotiation with Total Energy is to be careful in establishing timelines, something I understand was what caused the settlement to be delayed in the first round of negotiations in our concession 3b/4b.

The short summary of the matter is that the environmental application by Hammerstead is driving the price of our concession.

These traders! Imagine if they could use these pages to get people to sell when they themselves just sold, what a perfect world!

In the last five years, there is no empirical support for ECO doing worse in the summer, quite the opposite.

We are now waiting for information about environmental permits in 3B/4B, farming out in Guyana and Namibia respectively. AOI is now active in finding a profitable exit from ECO, perhaps it should not be seen completely unreflectively as a temporary oversupply, but a smart deal designed to suit the parties involved?

Correction.

I had then turned to the two owners in Starbroek and submitted the proposal to each of them for one borehole and, in the event of a commercial hit, another carried borehole.

Certainly there is a geopolitical interest for ECO to have Exxon or Chevron (the owners of Stabroek) as partners. What if another player bids 2 boreholes carried, all else being equal? I had then turned to two the owners in Starbroek and submitted the proposal for a borehole and, in the event of a commercial meeting, another carried borehole.

Partners matter.

For those who want to assess risk in the individual cases, see the changed approach to the border conflict with Venezuela in this link.

Worth noting is that before the US policy shift, Venezuela chose to have an aggressive attitude 2013 where they seized boats that shot seismic. After the shift, we know Stabroek's development.

"Then US President, Barack Obama had nominated Holloway in July, 2014 to be the next American Ambassador. Following his approval by the Senate in August, 2015 , he arrived in Guyana the following month. By May, 2015 US oil giant, ExxonMobil, announced a major oil find in the offshore Stabroek Block."

( "... Perry Holloway played a major role in changing the tone of the US’ position on the border controversy. “Previously, we had simply supported the timely resolution of the Venezuela-Guyana border controversy. In large measure because of Ambassador Holloway, the US government now calls on all parties to respect the 1899 arbitration decision...")

https://demerarawaves.com/2018/11/16/united-states-shifts-position-on-guyana-venezuela-border-controversy/

Brazil, China, GB, France...maybe Venezuela have Putin , for what it is worth in this case.

Thank's, IJWT.

These are necessary prerequisites. Perhaps I related to other conditions, even Total has to, finally, complete these processes in its concessions. Cet par. :-)

My take is as good a guess as anyone else's, but a reflection may be

1. 3B/4B is "drill ready" when it comes to 3D and an interpretation of these results.

2. I don't know how developed Total Energy's block west of us is in that regard, but Gil mentioned earlier that they were planning to drill near the 3B/4B boundary. Perhaps the answer is partly in this statement, i.e. it is, perhaps, that Total sees its new concession as the starting point for exploration?

I have no additional knowledge that makes me find our CEO's 12-18 month proposal anything but reasonable. As a result, I have bought the stock and now have more than ever before. I believe in a slow rise from here with more impulsive developments when, in addition, we have another block or two to consider.

Each concession has its unique news flow until the drill is put in the ground. Now is accumulation time, next is chasing the price time. :-)

Https://worldoil.com/news/2024/3/6/totalenergies-qatarenergy-acquire-new-exploration-license-offshore-south-africa-near-successful-namibian-discoveries-in-orange-basin/

In a previous post, I wrote that we do not know how Total's management intends to prioritize drilling in its concessions. I may have to modify this after Gil's determined performance in the presentation. The reasons that can be adduced for an early entry into 3B/4B are

1. That Total Energy's investment has given 3B/4B a valuation of around 300 MUSD (using Gil's figures). It is money on the table that is a measure of their interest in the concession.

2. From a production perspective with infrastructure in mind, it is logical to start from the Venus find and systematically work south.

3. In addition, there is apparently a time aspect attached to the deal which means that Total Energy can receive a penalty payment if they do not drill within the stipulated time in the agreement.

You can see where Total Energy has its blocks in the link above.

Https://www.proactiveinvestors.co.uk/companies/news/1042645/chevron-and-exxon-row-over-future-of-giant-guyana-asset-1042645.html

There are several aspects to consider in this settlement.

One is that Total's willingness to quickly get to drilling depends on their relative share in the blocks in the area and the potential that Total's crew estimates exists in these respective blocks. A knowledge we do not have.

As previously noted, ECO has chosen to take cash compensation instead of being exposed with a higher share in the block. The reason for this could be risk spreading in general, or that ECO sees a quick settlement underway in Guyana.

ECO's business concept is not to produce, but to sell processed values ​​in the ground. The company will receive bids even before an appraisal if the first drilling hits oil. Are we talking about 1 or 2 billion barrels, for ECO 60 or 120 million barrels in the ground?

We know from the Venus deal that the price to be carried through the entire production build-up - of the entire block in the future - is a further halved part. But which after 2-3 years of payback gives amounts of dollars at market price. - That is the option that ECO can sell. It's huge.

The money track ECO selected makes me think it is wrong to sell on the news. There will be more deals. And it is realistic to believe in a deterministic journey with a higher share price according to the model from previous outcomes until drilling starts.

Perhaps interesting to follow Sintana Energy's share price development from summer -22 to the start of drilling in November -23. Nothing is exactly the same, of course, but it gives an interesting angle. 200% after drillstart, slowly increasing to that date. Feel free to check news under that period of time.

You might say that a farmout in Guyana would make a difference. We will see.

Find it interesting that our CEO points out the Guyana farmout, specifically, as the next big news this year.

Milestones in the form of regulatory decisions will occur continuously during the year in 3B/4B, these are events that are now in Total's hands. For ECO, we can get the upside of this, but management may concentrate on other farmouts.

Anyone, What is the last official close date for the data room in the Guyana block? Biginning of April?