RE: Taxdemicco/MaysteelerI have to correct the info.
Contingent resource is considered non-commercial (but will be commercial when the wells and infrastructure are in place). Estimates are based on known accumulations
but are guessed (educated guesses at least) at. You'll see that the low estimate for contingent resource is only 1 million barrels, while
the median estimate, which they call the best estimate, is 60 million barrels.
Prospective Resource is completely undiscovered so why bother even mentioning ? (Why drill any exploratory wells anywhere if they don't consider the Prospective Resources. Do you really think they would drill if they figured they would find nothing?)
There is only a 10% chance or less, that this well leads to commercial development. (I believe they have assighned a 63% chance that the well is commercial) If they beat
the odds, then the economics are not near as good as other Kurdistan plays (They know for certain there is oil in this block). This one has
a 40% working interest plus a 40% royalty. Most others have a 10% royalty. The company agreed to an increase
from 10% to 40% in consideration for another 20% ownership( agreed).
My questiion has always been, why increase your royalty by 400% (Goofy math again. The royalty rate increased 300%)if they could have purchased for cash (cash would have meant increased dilution)?