RE:RE:CGX Energy Value Proposition 11/30/2021There will only be another dillute if they don't execute a farmdown. Even in a dry hole case, a farmdown remains highly likely. The Canje license is much riskier and they were able to secure a farmdown after a dry hole.
So the real risk is that Frontera keeps pushing ahead without bringing in another partner. That would be a very bad strategy IMO because their stock is already significantly undervalued because the market doesn't like their level of risk compared to their asset base.
Everyone knows that Frontera is calling the shots when it comes to farming down. Current strategy shows maximum greed:risk tolerance. If the well hits a huge oilfield then they will have captured maximum value...but they will still need money to appraise and that best comes by farming down either the field or the entire license. In the dry hole case, farming down brings money for more wells and adds market confidence that there will eventually be a discovery.