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Here's what concerns me a bitOML 18 is 1.5 bln boe 2P so 45% would be 675 mln boe. So the alleged price would be $ 1.2 bln/ 675 mln boe = $ 1,78 per barrel however most of that is gas, which sells for $ 2 per mmcf or $ 12 per boe, maybe 3 mmcf if you're lucky and get a good contract like Seplat did. With about 23k production (21k oil/liquids as I understand) they paid $ 52.000 per flowing barrel, not cheap in Nigeria. Assume 30% is oil or ~ around 200 mln barrels. Deducting the gas BOE's @ a 1$ cost (which I think in Nigeria is richly valued). They paid: $ 1,2 bln - $ 475 mln = $ 725 mln for 200 mln 2P or $ 3,60 p/BO. That'd be decent but again assumes 30% of the 1.5 mln BOE is oil. Then we have the comment in the article: Some bankers fear bubble-like conditions are emerging in the industry, which account for the inflated prices of some these assets. The gas/oil ratio is pretty crucial for determining this deal is good or not. Also I do believe it has LT prospectivity, I just don't think this will matter to us in the near future given Nigerian time. At the AGM there was spoken of 4 partners for around ~11% part of a possible deal (OML 18) . So what MMT would get:
They would pay: $ 300 mln ($ 56 mln of $ 300 mln is 18.6% so something is not adding up unless MMT deposited money for someone else). However I'd rather go by what management told me about a possible deal. $ 600 mln if it's just the 2 of them, which wouldn't make me comfortable to raise at all. Last question where to get the money and when does it effectuate? Some through debt I am sure but not all. So I continue to wait to get more clarity, certainly since a PP has been bandied about. Interesting times but as always, clear as mud. R. (PS I'd rather have them make a deal like Eland on OML 17 carve out where they pay a mere $10 mln for 40+ 2C/3C, that can be relatively easily converted into 2P/3P - little risk/much upside) |
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Msg # | Subject | Author | Recs | Date Posted |
12129 | Re: Here's what concerns me a bit | goldiehawn | 17 | 8/27/2014 11:17:50 AM |
12141 | Re: Here's what concerns me a bit | Crucible401 | 39 | 8/28/2014 1:55:42 AM |