The way I see itWhat WZR is doing now makes sense to me. Re-enter Sarqala-1 because they know what's there waiting for them if they can succesfully sidetrack.
If they are successfull I would expect them to have a 2000 to 3000 barrel per day well producing and the production can now be trucked and sold.
By drilling Mil Qasim-1 to a relatively shallow depth next they would fullfill the requirement to the KRG for a third exploration well and because of the very close proximity
to Sarqala-1 is less risky and they are expecting to bring another 2000 to 3000 barrels on line there.
I think it is management's objective to establish some cashflow from S-1 and MQ-1 to stop the hemorrhaging of working capital and to fund future operations like K-2.
I don't know if it would be feasible to capture and separate the condensates, another 2000 to 3000 boe's, and flare the gas at K-1.
Condensates sell at a substantial premium and could bring in extra cash.
By drilling MQ-1 on their own they will get the full benefit from the well if successfull without having to share the proceeds with TLM.
This seems to me an act by TLM to keep WZR alive and not because of some discord between the partners.
It's simply the best allocation of exploration funds for both companies.
TLM is doing WZR another favour by drilling Topkhana-1 ( spudded in mid Feb. ) now in close proximity ( 12 km northwest of K-1 ) on Block K-39.
TLM's Block 39 is of substantial size and I'm sure they have many targets they could drill for their first well on their block.
As I mentioned in one of my previous postings TLM choose the location of Topkhana-1 because they know it is their best chance of success based on what they found at K-1.
They would not spend 50 to a 100 million on Topkhana-1 if it wasn't the best location on their block.
Success by TLM at Topkhana would have a considersble impact on WZR's SP.
K-1 and T-1 are two separate anticlines with their own closures but share the same underlying deeper structure.
If WZR is successfull getting some cashflow going the may not have to dilute the shares further ( it would be at a higher SP ) as they would have the option to borrow working capital.
There are still substantial risks in this spec play but at the moment I can live with the risk / reward this play offers.
I'm long and holding. Of course I could be totally out to lunch too with my thinking.
Best Regards and have a good weekend.