RE:RE:RE:RE:A joke of a AGM I actually think the AGM went well.
Two key observations. First, they mentioned engaging prospective JV partners after the Kawa reached TD (total depth). I my read through here is that they feel very confident in Kawa and are not going to give this high valued zip code away at a discount. BRAVO!
As mentioned earlier, any prospective joint venture (or strategic) partner needs to pay up for these assets. Basins like these don't come around all that often. In fact, this will probably be the last one we see ever of this size, scale, and magnitude. Do you think there are other assets out there that are anywhere comparable to the Guyana-Suriname basin in terms of per barrel breakevens? Let me save you all time and energy - there are none that come close to comparison. Especially when you consider our PPLs were established pre-Liza with favorable fiscal terms.
We are sitting at the mouth of the largest canyon feeder system know across the Atlantic Margin. The same feeder system associated with world class discoveries of Haimara, Pluma, Redtail, Yellowtail, Turbot, Tripletail, Tilapia, Maka, Kwaskwasi, Sapakara, and probably another half a dozen or so other world class prospects that hey yet been drilled by Exxon Stabroek venture or the Hess-Total Block 58 venture. Mapped to be 10x the size of the Grand Canyon. CGX's Northern Corentyne Area sits at the mouth of this giant feeder system with two massive fan system verified through modern 3D seismic.
Note, of the prospects Exxon and Apache-Total have drilled that are associated with the Berbice Canyon system - success rate stands at 100%.
To feel satisfied with arrangement that would give away half of our 66.6% interest to a JV just so we could get a well carry or two is an absolute joke. An embarrassment and classic example of value destruction.
Say Kawa does not come in. So, we transfer the $20M loan into equity (cannot dilute shareholders more than 10%) and move on. We get the license extended and re-group while retaining 66.6%.
Second, the operations team that were on the call have over 75 years of deepwater experience. Kevin Lacy, just for everyone's benefit, ran Chevron's deepwater Gulf of Mexico operations at one point in time. That's overseeing a roughly five deepwater rig program and definitely are some of the most complex wells in the world to drill.
Mike, Jennifer, etc - this team has an impeccable deepwater resume and we are fortunate to have them on board. Stealing to talent for the super majors - love it!
I know the camera angles weren't perfect - but, liked to see the team and hope to see more of them. Excited to be able to interact with them during the next earnings call.
So, what happens next? As the rig starts to move to location, the well is SPUD, and the bit turns right - it's going to get really volatile. Many investors (new and old) are going to have a different to what CGX may be worth and whether Kawa will be successful or not. We have a possible valuation discrepancy $8 dollars to $0.50.
You on this board who have been here for a long time know the story. We have been through some tough times. There have been years where the company's vision and direction were often unclear. But, we all believed in the value of the basin and the assets.
You may want to use this as an opportunity to take profits - I get it. Or, may be a good time to sell out. Some of you have more than 200% gains here. Perhaps already experienced life changing returns.
But, this next chapter in the company (drilling Kawa) is going to be its most dynamic. We have always dreamed a time where we would see CGX return to drilling - hoping it will drill close to the area where Exxon and Apache was successful.
This time is upon us now. No MM, hedge fund or money manager will be able to manipulate the true color of this stock. There is no investor presentation either that will alter investors view of CGX. The true value for CGX now rests with the drill bit. As a long term shareholder of CGX and investor in the Atlantic Margin - that's all I have hoped for is the opportunity to drill among the giants!
GLTA