RE:RE:drilling stopped and suspendedConsidering the last 3% went for $7 million, on what planet would that be a good idea?. Keep in mind that our deal with Exxon includes the over $100 million dollars to cover our side of the drilling (which was built in to our sale of 80 percent). Elevate the share price? unless XOP immediately swung the 17% sale money into another venture (which would see some kind of drilling operations commence in the next few quarters) XOP would be an oil exploration company that what? has zero assets, but the option to bid on another block that most likely is without modern seismic data. Looking at the previous Nigeria OPL 2010 option the first portion of the operation was to do seismic and then see if XOP wanted to drill based on that information. XOP would be LUCKY to see 10 cents a share under that scenario.
I think that if XOP is serious about the WATM bid and the other prospects that were recently stated (July 23) they will most likely do another private placement. At these prices 50 million shares could still go for around $10 million. Then again if no firms want to purchase that amount of shares at these prices, XOP could give up probably another ~5% of the block given the previous exchange (This would definitely not be ideal). Also there are most likely other financing options that I am not stating here and I don't know the value of XOPs bid; so the numbers stated above could go up or down. I also don't know how seriously XOP is looking at these prospects (we should find that out in the next few months).
I do find it odd that if XOP is insanely confident in this block why would it give up even a percent of it?. If the total block has lets say 1 billion bbl, each percent is 10 million bbl and using a conservative price of oil in the ground of around $5 each percent could be worth $50 million dollars. To me, giving away 3 percent for $7 million when it could be worth $150 million stinks of either desperation or a lack of confidence in the block.