Replies to post #2391 on GulfSlope Energy Inc (GSPE)

[spec machine]

One more interesting quote from the S-1 filing

In addition, the terms of our leases may also be extended by the granting of a Subsalt Lease Term Extension, should we elect to apply and qualify for said extension on any lease(s).

BOEM document on Subsalt Lease Term Extension

https://www.bsee.gov/sites/bsee.gov/files/notices-to-lessees-ntl//ntl2000-g22.pdf

spec

[smith199]

BOEM displays “Pending Action” on Corvette Lease G35193.
Source: BSEE Data Center, Leasing Information Category, PDF Report Downloads Category, Choose: “Lease List”, Choose: “Active by Area Block”, Go to: Page 51 of the BOEM PDF report under G35193.

Excerpt 1: “P in the Appeals/Pend Act column Indicates Pending Action on the Lease.”
Source: 1st Page of BOEM PDF report under Notice:

Excerpt 2: “In addition, the terms of our leases may be extended by the granting of a “Subsalt Lease Term Extension” should we elect to apply and qualify for said extension on any leases.”
Excerpt 2 found by Spec Machine Post 2392 dtd. 8/10/19. Source: 8/5/19 Gulfslope PR, PDF “Prospectus Summary”, Page 13, 2nd Paragraph, Lines 4-6.

Excerpt 3: ”Within 30 days of receipt of the request, the BOEM GOM Regional Supervisor for Leasing and Plans will provide written confirmation of whether the lessee has earned the extended Primary term and update BOEM records accordingly.” Source: DOI BOEM “Proposed Notice of Sale August 22, 2019” 22 Page PDF report, Page 8, 3rd Paragraph, Lines 5-7.

Summary:. Corvette Lease G35193 VR Block 375 is an “Active Lease” with a “Pending Action On The Lease.” It also has a 7/9/19 Exploration Plan Approval from the BOEM.

The other Corvette Prospect Lease G36357 VR Block 376 is an “Active Lease” with an Expected Expiration Date of 11/30/2023, with the New Royalty Rate of 12.50%.

Opinion:. I presume the BOEM would provide written confirmation within 30 days of a “Subsalt Lease Term Extension”, if in fact, that is the type of lease extension they applied for.

BSmith

[smith199]

Opinion: Corvette Prospect should take around 150 days to Drill (This includes Exploratory and Appraisal). On Gulfslope’s 12/31/18 Initial Exploration Plan (EP) for Corvette lease G35193, VR Block 375 submitted to the BOEM, they show the relief well to be at 150 days. (That is the same time frame initially allotted for drilling the Tau Prospect which included Exploration & Appraisal during that 150days. Source: GS’s May 30, 2018 Presentation, Page 7, Archived out on Google.)

The Tau finished on May 27, 2019 and they had the (“NSAI”) Netherland, Sewell and Associates Resources Report completed by June 1, 2019.

I presume during the 150 day “Drilling” process of the Corvette Prospect , while each target depth is being reached they will Test, Analyze, and Appraise any Reserves or Resources.

At that time, the Appraisal report (Verified by a third party) would reflect “1P” (Proven Reserves), ”2P” (both Proven and Probable), or ”3P” (Proven plus Probable plus Possible) if Commercial.

Summary: The SEC allows Proven Reserves to be reflected on the Corporate Balance Sheet as “Assets”.. They also allow 2P and 3P to be referenced. This all possibly in a 150 days of “Drilling” (Exploration and Appraisal) the Corvette Prospect.

The Presentation also showed 150 days on the Tau for Regulatory/Production, which probably includes data gathering, submittal and BOEM approval. I presume something similar with the Corvette. It also reflects many more months on development.

Excerpt:u] “Early Monetization of a discovered asset or a portion of a discovered asset is an option for the Company as a means to fund “Development” or additional “Exploration Projects” as an alternative to potential equity or debt offering.” Source: 8/5/19 GS PR, Prospectus Summary, Page 24, Paragraph 4, Lines 6-7.

BSmith