RE:GUYANA PETROLEUM ACT: UNIT DEVELOPMENT - HAIMARA & PLUMA Read the prior unit development post first.... Then read below....
An interesting equity report was issued in late 2018 that evalautes Eco-Atlantic and their 15% interest in the Orinduik block (link is below). The evaluation takes into consideration Exxon's recent Hammerhead discovery and associated benefits it may receive (or be entitled to) under Guyana's 'unit development' framework. Copy and paste of the equity report in italics below.
Hammerhead - Exxon’s discovery could be a company maker for Eco:
Without even having drilled a well, Eco appears to have a large resource to appraise on its block (Eco has 3D over the whole discovery). Exxon’s recent Hammerhead discovery in Guyana has the potential to be several hundred million-barrels and based on the seismic it looks like a large part of the structure could be up dip on Eco’s block. There are regulations in place (Petroleum Act) to ensure unitisation of the discovery if developed. Assuming a 500mmbbl discovery with 50% is on the Orinduik block, at US$5/bbl it alone would be worth 88p/sh unrisked to Eco. Like Eco and its partners (Tullow and Total) - CGX may be looking at a multiple unit development pending news of the Haimara-1 well. Using the same evaluation principles as the equity report relied upon - and applying it to CGX's 66% interest in Corentyne (whcih I reminded everyone on the prior post it should be 100%) - the impact to CGX shareholders could be significant.
- Assuming Pluma is a 500mmbbl discovery with 50% located on the Corentyne Block, at US$5/bbl would alone would be worth US $7.11/sh unrisked to CGX.
Note, the Haimara well (if successful) could double above mentioned projections . As the research report stated - this could be a company maker!
You can readh the full equity report here: https://www.ecooilandgas.com/wp-content/uploads/2018/10/Eco_Atlantic_note_Oct_18_FINAL.pdf