THOUGHTS There are many insightful posts to read through this week - thought I would add my scratch notes. Take with a grain of salt.
1. You have to believe PRE is pleased with the momentum that is building (and the unofficial extension of Georgetown Block). As PRE mentioned in their recent presentation in September - they seem interested in their ability to increase their stake in CGX from roughly 35% to 41% (exercise of .60 warrants). Of course...everything here is timing. Important to note, that if the warrants are exercised this should provide CGX with approx. US $25.7M in cash.
2. In review of the news releases this week I would believe Jaguar-2 will be drilled within the next 3-6 months. As mentioned by President Ramotar - sourcing of a bigger rig is underway.
3. With all interested parties looking at various options in contuning exploration offshore Guyana (CGX, Tullow, Repsol, YPF, Guyana, etc.) - it may be possible that all parties are attempting to strucutre a deal that will bring in a 'bigger rig' on some type of long term charter - lower daily rig rate and ability to drill multiple wells offshore Guyana. I believe this would be the most logical way to proceed forward in pursuing a strategy that involved drilling mutiple wells offshore Guyana. Just speculating.... but it may be possible that after the 'bigger rig' drills Jaguar-2 it may then proceed to drill Eagle-Deep. If Jaguar-2 is successful - you can bet the Georgetown partners will be eager to get their hands on the 'bigger rig' for a follow up appraisal on Jaguar-2 - after Eagle Deep is drilled.
4. An extension to point 3 above - if there is going to be a long term charter for the 'bigger rig' and a big picture strategy pursued of drilling mutiple wells offshore Guyana using this 'bigger rig' - the Guyana government will need to issue (in a timely manner) the Corentyne Block extension to CGX - which is the only other offshore block that has a drill ready prospect (as 3D seismic, interpretation of seismic, etc. has been completed...cost of over US$10M). Again, I am just speculating here - but, I would believe it will be in everyone's interest to pursue a strategy that would involve sourcing a 'bigger rig' on a long term charter drilling mutiple wells offshore Guyana.
5. While the CGX has an obligation to drill a well on the Corentyne Block by June 2013 - I believe this could be negoitated (or discussed) with the Guyana government by proposing some type of alternative work scope. For example, modifying the time frame in which the June 2013 well needs to be drilled to account for utilzing the 'bigger rig' under a long term muti-well charter offshore Guyana. As part of this negotiation, CGX could also propose shooting, in the near term, 3D seismic over their Annex Block. Again, all part of a negotiation which will be discussed in parallel with the block extensions.
6. Interesting to see a third party pay $4M to CGX in order to gain access to their well data and seismic information. Also, encouraging to see CGX commend the Guyana governement for their assisitance in "license re-issues and farm-outs has been of great assistance in advancing these initiatives". Certainly seems Guyana is channeling all players towards the present block owners / operators.
7. Back to point 1 (kind of going in a full circle here). Don't think that PRE is not looking at these options closely. It is likely that PRE is in the background watching events unfold. At the end of the day - PRE may come in at some point in time (everything is timing here...) and offer CGX something more attractive than what is on the table. There is 2 ways in which PRE benefits: 1) either CGX retains the assets (PRE owns 35%-41% of CGX); or 2) PRE comes in as a JV partner.
In what way will PRE not benefit? By CGX unloading a large percentage of these assets to a unrelated third party under unfavorable terms. I don't believe PRE will let this happen (i.e. give away the farm for nothing).
I am looking forward to the future...Believe things will be positive. I look for PRE within the next 4-6 months to execrise their .60 warrants!!!!