OTCPK:WSRLF - Post by User
Post by
MrGoodKindon Aug 15, 2014 6:04am
310 Views
Post# 22845184
Finance, Risk, Reward. Boom or Bust?
Finance, Risk, Reward. Boom or Bust?Trying to gather my thoughts in logical order for a post bringing my perspective on things for whatever it's worth.
To start off I'm not a geologist or in the oil and gas business thus some of my assumptions about geology and development costs might be way off the mark. If so please correct me.
As I understand the geology of especially our Kurdamir field it's complex but holds a lot of oil and gas. From the development costs in the north of Kurdistan where they seem to drill wells in under half the time at least in the zones that e.g TAQA is developing in the Atrush block I believe developing one production phase good for 30k bbld costs about $600m including wells and production facility. I assume that the costs for Kurdamir would be greater partly because of the time to drill new wells and partly because of the geology? Appreciate any correction here., and does anybody know if WZR would still have to pay 60 % of the costs during the development phase? I seem to recall that once the develpoment plan is in place and approved by the MNR you only pay according to your share of the field?
Garmian seems (from a laymans perspective) a little less complicated and with albeit limited but still imminent cash flow. There still is some geological upside to Garmian as well.
I guess my dream scenario (pending on the above being accurate) woud have been a sale of only Kurdamir repayment of outstanding debt, a smaller part for deveopment together with cash flow and a one off dividend pay out. It would have brought a sort of balance between risk and reward.
The way I do see things pending that WZR goes through with the equity is that the risks have increased (due to increased interest payments). On the reward side WZR would still have the possibility to sell during a better market, prove up more oil etc.
Would like to see some analyst reaction to this and I do wonder mostöy out of curiosity which that international Oil and Gas company was...
Any thoughts welcome!