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Tuesday, February 10, 2015 1:45:51 PM
First, did you notice that Perseville now owns 25% ? After the Chelsea deal it was only 12% so that means they've bought out Sakhai. Check out the investors presentation on the terra nova website, it now also only lists Holloman, Perseville and Terra Nova as owners of the Pel's.
Why is this important ? Because of the following line in the PR:
"As additional consideration for the Purchase Price, Terra Nova will grant Perseville (which currently owns a 25.6% working interest in each of PEL 112 and 444) the right to fund any future wells drilled by Terra Nova on PEL 112 and 444 in proportion to the working interest contribution amount of Perseville set forth in the Farm-In Agreement. In the event that Perseville provides such funding, Perseville will not be required to dilute its existing working interest as required under the Farm-In Agreement with Terra Nova."
If the farm-out is completed (after this drilling campaign) then Chelsea and Sakhai were supposed to transfer about 16% of their ownership in the PEL's to TGC. The above line indicates that that is now no longer the case (my interpretation of that line - I could be wrong). This means that TGC can now never own 55%, it's probably max about 40% now (I would have to recheck the % owned by each party to verify).
I also hope that they don't give up 5% ownership for every 3 million dollar (for drilling 2 wells). Since the drilling campaign would be for 8 wells then you see where this might be leading: 4 x 5% ownership for 4 x 3 million for the complete drilling campaign. This would give Perseville 45% ownership, HENC 28% and Terra Nova 27%.
I'll await final judgment after the definitive agreement has been made and more information is available on further financing.
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