Replies to post #2500 on GulfSlope Energy Inc (GSPE)

[Trip-Fontaine]

Yes, we just have to hope that financing from Delek wont mean too much dilution for us other shareholders. Tau 2 should be like 30-40m to drill (if everything goes smooth, which wasnt the case at Tau 1) and GSPEs 10% of cost (3-4m) would be like 10% dilution at todays share price. There is also the TXSO 5% share of Tau that GSPE could get their hands on since TXSO defaulted on paying their share of cost. Those 5% could be traded to Delek in exchange for 100% cost cover.
Then there is Corvette, and we dont know the deal with the new mystery partner but the Delek deal was 75% WI in exchange for 90% cost cover. This time with Delek as a strong shareholder they might give a second partner 60% in exchange for 100% cost cover?
Best case we could get all drill cost covered and get a free ride but still need a few millions to overhead costs, and to keep up drilling pace before leases expire!

[smith199]

“Delek will have the option to purchase up to 5% of the company’s common stock upon fulfilling it’s obligation for each phase”. “At a price per share equal to a 10% discount to the 30 day weighted average closing price of common stock preceding the acquisition.” “This option will expire January 8, 2020.” (Source: Gulfslope’s 6/30/19 10-Q, Page 15, Note 3, 2nd Paragraph, lines 13-16)

Analysis:
Phase 1 (Canoe and Tau) of the January 2018 Partnership Agreement has concluded, it looks like Delek still has the 5% option on the table. It would put a multi-billion dollar company (Delek) at round a 27% ownership in Gulfslope. By the time January 2020 rolls around maybe Gulfslope would have released “Good Things” about the next Prospect, thereby increasing the 30 day weighted average stock price.

Opinion:
I anticipate if this comes to fruition, Delek will have some brilliant future ongoing plans for Gulfslope.

Delek includes this statement in all their Regulatory filings under the topic “About The Delek Group”: “Delek has embarked on an international expansion with a focus on high-potential opportunities in the North Sea and North America. Delek is one of Israel’s largest and most prominent companies with a consistent track record of growth.” (Source: Delek Group, Investor, Regulatory filings, choose any one of the most recent filings)

My perception is, a potential 27% ownership in Gulfslope by a prominent multi-billion dollar company is way better than any short-term investors. In fact, I would not mind them owing a little bit more.

Smith

[smith199]

I think you made a good point in that, Delek’s 22% investment is in the Company not the Prospects.

Interesting Fact 1: Delek GOM Investments, LLC is a wholly owned foreign subsidiary. Delek Group is the Parent who is on the Tel Aviv Stock Exchange. Delek GOM Investments, LLC is the entity that Partnered with Gulfslope.

Interesting Fact 2: “In order to become a Lease Holder a “Qualified Bidder” must be a legal entity under U.S. Law, including being an American National, Resident Alien, Corporation or Partnership or any Combination of the above.” ( Source: BOEM Document “Oil and Gas Leasing on the Outer Continental Shelf”, Page 4 excluding cover sheet, section “Acquiring a Lease”, Paragraph 1)

Maybe this was just one of the many attractions to Partner with Gulfslope Energy. I think it was an array of things, for example their many years of Industry Experience, Mr. Seitz’s Recognition from the Oil Industry, Their extensive Seismic Data collection, Their Past/Current Portfolios, etc., etc., etc.

I think that Gulfslope and Delek have demonstrated their commitment to the Partnership by their drilling of the Tau well no 1, and their ongoing consideration and analysis of Tau well no. 2.

Please reference my May 25, 2019 post no. 2264 for further details on this subject.

Smith