RE: Stirring up a hornet's nest
MISFT1 - good post.
On an earlier conference call Steve Hermeston stated that if a discovery is made, CGX would have the right to convert the Discovery area plus reasonable surrounding acreage to a Production Licence, subtracting this area from the Contract Area. The term of the Production Licence is 20 years, renewable for a further 10 years.
Importantly, Steve clarified that "surrounding acreage" should be taken with a broad context. Specifically, if a discovery is made at Eagle Shallow - the "surrounding acreage" would also extend to Eagle Deep.
This is almost unheard of in the O&G industry. In most cases, if a discovery is made the Company usually has the right to only that specific prospect which has been discovered / penetrated / tested.
Back to my point - if CGX makes a discovery with Eagle Shallow, according to Steve Hermeston, the 20 Production Licence would extend to Eagle Deep as well. This should take a ton of pressure off CGX (should a discovery be made at Eagle Shallow).
Does any of the above information change your thoughts about CGX issuing additional shares?