RE:RE:CGX VALUATIONSLot's of good comments from the board. Note, the valuation and possible scenario of Frontera selling equity in CGX in combination with CGX farming out their license (or licenses) to a potential new JV partner is one of many viable options on the table for consideration.
It is just as possible CGX (and / or Frontera) could be bought out altogether prior to drilling commencing.
Or, CGX could initially partner with a smaller investor (perhaps Africa Oil and / or the Lundin Family) to cover their 2020 exploration costs on both licenses in exchange for small farmout in each license (say 10-15 percent farmout). Don't forget Frontera is obligated to cover CGX for 8.5% of the gross well costs from the first two exploration wells on each license...
Just as well, CGX/Frontera may want to selectively sell or farm-out certain assets.
It's also possible - before any deal takes place - CGX is able to secure a unitized arrangement with the Stabroek and / or Orinduik to ensure a clear path forward in exploring/developing/producing reservoirs that cross into CGX licenses.
There are simply many possible scenarios available. The key question is: which scenario will maximize shareholder value for both CGX and Frontera? It's possible that answer might involve a series of transactions. For example, CGX/Frontera might be willing to take on a higher risk during the initial 2020 exploration campaign and look to harvest their investment after a discovery.
Alternatively, CGX/Frontera may want to harvest (or re-coup) their investment now prior to drilling to minimize risks of drilling a well deemed to be non-commercial.
In summary, when you are in the hottest (most prolific) offshore basin in the world and surrounded by multiple world class discoveries - there will be many fantastic options to consider.
For us minority shareholders, we just have to stay patient. Those big money / institutional managers that are in the outside looking in - let's make sure we (CGX minority shareholders) make them pay a premium should they decide (at some point in the future) to buy shares of CGX!