Thanks for the comment JS. |
Your approach is one possibility & a very reasonable one. However, it leaves |
potentially 2-3 billion barrels beyond the control of HDY & partners and also lessens |
the potential value of the lease that they will be buying into. |
I think it would be difficult to drill a deep water well beginning in April 2017 and |
drill a second well before Sept 2017 even if the total time of first drilling was only 42 |
days as suggested in the article by Guinea News. |
I believe that Guinea would like exploration of it's property as quickly as possible |
to hasten the time of enriching the nation and resulting development. |
This consideration might influence the government to alter some of the plan's |
restrictions presently proposed. |
We see many prospects with 3-4 partners sharing the risk of unexplored |
territory. HDY had 10-11 interested exploration companies when they began |
originally searching and befoe Tullow. |
Another approach would be to partner with 3 quality operator companies and make the |
concession a community investment for them. Each would be the operator of |
one or two of the prospects and the other two & HDY would have working interests |
in that prospect. Fatala, Nimba, the Neocomian & Eocine prospects would be under |
separate operators. If Fatala is a commercial discovery, either Sylli or Nimba would be within |
it's development envelope. The Neocomian & Eocine are more shallow drills and |
consequently should be faster to end point. |
All three partners would have a 20% each working interest in all five of the |
prospects as well as equal profit sharing. HDY would maintain 40% working |
interest as well as profit interest. This should avoid any argument concerning |
operator competition for a more prospective well as they all have the same |
overall expenses and share of profits regardless. |
I believe that HDY could partner for a 20% share at a price of $40 M/company that includes |
seismic and other data past performed (think the total seismic costs were approximately |
$40 M alone which should be worth $8 M/partner) & other data & NSA worth another $2 M. |
This would put a price of $30M/partner for a 20% interest in a lease of potentially 5 Billion |
barrels over 5 prospects. HDY would receive $120 M to pay working interest. |
If we assume an average cost/well of $75 M, the total drilling cost for all 5 explorations |
would be $375M or $75M/partner & $150 M/HDY. The total cost for each partner would |
be drilling $75M, $10M prepaid drill data costs and $30M for partnership. |
Were only one of the five potential drillings be a commercial success, the partners |
would be ample rewarded for the venture. |