RE:RE:Possibilities.Hess CEO said recently that cost per barrel to produce Liza was running US$25 to 30 per barrel. I don't know if that includes royalty tax but in CGX's case I believe that there will be no tax until they recover 155 million in money invested so far.
So even at $10 per barrel profit we're talking 10 billion in profits of which CGX gets about 3 billion. So that's about $10 per share. But it will take time and big money to put it in production. At Liza Exxon had to drill 17 wells in total to produce it. If memory serves 8 production wells, 6 water injection wells drilled to below the oil-water contact and 3 natural gas injection wells to increase reservoir pressure.
At the proposed Pinktail development Exxon is talking about having to dril 76 wells. But that project is designed to produce 220,000 bbl/day. Anyway huge upfront cost. That's why lj and others say that they'd prefer a buyout or farm in because otherwise CGX wouldn't see cash flow for a few years. They'd have plenty of total assets but no liquidity. And lack of liquidity is a company killer. Look at what happened to Nortel with impressive assets but little cash to operate. So I like the farm-in idea. Produce immediate liquidity to carry on with Demerera, Berbice and the port while keeping an interest in Corentyne. But it'll be up to fec what happens. Shareholders have to approve and they own about 73% of the shares.