RE:CGX Hires V.P of Development ? In my opinion, this announcement is a clear statement that CGX / Frontera are casting a wide net and keeping their options open to "strategic ventures".
We all know any large E&P or supermajor could farm-in (post discovery) to one or more of CGX offshore licenses. In fact, we just observed this play out on Block 58 when Apache farmed down half their interest in Block 58 to Total. We almost have a benchmark on what they looks like in terms of potential deal structure at ~$60/bbl Brent.
However, there could be other interested parties out there who would want a piece of CGX (or it's assets) that are neither a super major or large E&P. Perhaps, these interested parties would consider paying a higher premium (on better terms) than what a super major or large E&P would consider offering. After all, we are talking about one of the prolific and lowest breakeven offshore basins in the world.
This could be, for example, a large private equity company (like Riverstone Holdings) that have bank rolled many E&Ps in the past.
It could also be a National Oil Company (like ONGC, Qatar Petroleum, etc) that would prefer to invest in a non-operating capacity.
Given there is an abundance of deepwater talent available, I could see Frontera / CGX being open to contemplating developing (operating) the resource.
Again, this is about evaluating options and selecting the path (as de Alba put it) that "would maximize long term shareholder value". Perhaps, this is what Frontera / CGX are considering given this announcement (VP, Development) and keeping their "strategic" options open.
I don't think any would doubt the CGX operational or geological teams capabilities - since at one time these individuals were overseeing either super major or large E&P deepwater drilling programs around the world. Their track record speak for itself.
After all, oil is approaching $90/bbl Brent. We are beyond the $60/bbl environment for the foreseeable future.
I personally applaud the move and appointment. CGX / Frontera must continue down the path of maximizing shareholder value.
Also, enjoy reading what OCM and dragonfly have mentioned regarding the opportunity here to unlock considerable value through a multi well exploration program. Again, we are not talking about hundreds of
millions of dollars - we are talking billions of dollars for every exploration well that is successful.
That's not OIL_RUNS assessment - that comes from Citi analysts who estimated $3.5 to $4 for each discovery (assuming 500mmboe) given Apache's 50% interest in Block 58. Apache has +388M shares outstanding.
Pretty exciting - we await Kawa results with development within our control.