Saturday, September 25, 2010 12:28:27 PM
So you believe that the minnows are leaving because they have not paid phase one drilling costs. It would make sense that payment would be due prior to entering the next phase.(phase one costs are known fully only at the end of the phase) Panoro obviously is in no position to pay for anything that won't give immediate returns. Makes sense, but as always with this investment we don't know for sure that is what is going on.
At any rate it puts a maximum risked current value on block 3. Exploration costs to date plus a buck. Otherwise Panaro would have sold rather than relinquish. Excludes SNP/Addax and probably Total as buyers because at least SNP and Addax will get the rights anyway.
There you go Krom, a max risked value metric, probably works for all the blocks, assuming all the leaving minnows are relinquishing in like fashion.
It also locks in the end of the phase, minnows would not leave if they could put off payment further, IE another extension of phase one. And the delay going to phase two is just settling the disposition of all the minnow's rights. And taking the time to force them out.
One more argument that phase two is a lock. If one assumes the minnows were allowed to pay at the end of the phase rather than pay as you go. It would be nice to see something in one of the contracts that lays that out.
Actually the fact that they are all leaving now, after the first extension of phase one, pretty much makes it a lock that they did not have to pay as they went, and that phase one is over, they are leaving because they have to pay now. Ha ha. The whole industry knows we are going to phase two and we are waiting for an announcement.
The above makes perfect sense to me, but I am still on my first cup of coffee.
Comments welcome.
db
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