Total joins the Elephant HuntOn one hand we gave up a whopping 25% of Oridinuik to Total. On the other hand Eco avoids potential huge dilution from a raise to drill 2 wells very expensive offshore wells. At 40 percent our portion would have been $14.4 million per well or $28.8 million for 2. This deal gives Eco 2 lives on the Oridiuik block. It de-risks the very expensive offshore elephant drilling aspect in a crappy oil market.
Does Eco mgmt think there may be at least 2 targets based on the initial 2D with 3D to follow? Does Total think that as well? Regardless, Tullow must be happy to have Total on board. The market does not appear to understand yet but 15% of a carried drill program on a 750 million to 1 billion barrel discovery would be huge for Eco. Investors/companies often bet the farm on a tiny $7 million dollar on frack well for a puny IRR and perhaps break even. This is a ridiculous opportunity for wealth creation compared to that. I will be sleeping easier and then perhaps not at all once the 3D targets are identified. My 2 cents....