The investor is confident enough to put down 1 million. Given we are still priced well below an oil junior I think it's a good move. If a placing is taken by one investor it often increases the price but we shall see.
The dispute resolution has left a strong partnership company. Essar Mauritius (EM) have the cash and are funding first drill. What EM didn't have is/was a good relationship with the Nigerian government. Shoreline have a great relationship with the Nigerian government so they will be the go-between. They also provide the indigenous element to the project, that is critical to allow fast track production without which this project would have to follow a much more laborious route. COPL didn't have the money nor the government contacts. They provide the expertise to plan, appraise and develop an offshore oil field and their work has led to the submission of an enhanced Field Development Plan (FDP) as encouraged by the government. So a very nice fit all round and I can see why the parties decided to settle rather than take the dispute to the brink and break up.
1. The new board structure of Essar Nigeria (that consists of the entities 'Essar Mauritius & Shorecan' , for newcomers) (Shorecan itself is a company set up by COPL & Shoreline also for newcomers). A change to the board is a foregone conclusion given the turn around in control.
2. PSC extension. Expected within the next 30 days. Interesting point here is that the last extension was conditional upon 'the submission of a Performance Bond of $7 million that is required further to the Production Sharing Contract (“PSC”), to cover the Phase-1 exploration period work program at OPL 226.' Can we expect a full extension rather than a conditional one this time around with the bond being paid straightaway? If Essar Mauritius want a confirmed extension then chance they may go for payment straight away. Is the performance bond part of the costs of drilling? We were looking at a $1.75m contribution tot he bond. Has this changed?
3. Performance Bond paid.
4. Once the bond is paid then Ministerial consent on the new share allocation.
There is also the issue of the Mauritius Commercial Bank Limited and Trafigura term sheet. This is without doubt out of the window. Additionally the crude offtake arrangement as part of that term sheet goes with it. It was tied in with us (Shorecan) securing $100m from a service provider and also spending $20-30m, neither of which are our responsibility now although we have probably gone some way to achieving the latter already.
It would also be good to have Art confirm that the field development plan as submitted to the NNPC 18 months ago for Phase 1 and Phase II is still what they will be working to. That, 'involves the drilling and completion of a horizontal oil production well offsetting the 2001 Noa-1 oil discovery well and the drilling and completion of two (2) to three (3) additional high angle oil production wells in the adjacent Noa East fault block from a common wellhead platform, and placing these wells on production in an approved early production scheme.'
Should be a run of forward momentum news coming out relatively quickly.