WISR Ltd V.WZR

RE: RE: Total RELIEF

[canadafox]

f77;  In reply to your question ( made elsewhere ) on the value of TLM's participation payment.  My point is ( and has been for very many months ) that the participation payment from TLM is an extremely basic valuation of WZR.  You are right when making the simple calculation that the additional $280m costs are worth 70 cents per WZR share at a 400m share count.  But, TLM have already spent $220 m with the KRG for Blocks 44 ( pre-Kurdamir/Garmian split ) and K39 ( Topkhana ) and K9 ( Baranan ) and so the $280m payment is in addition to their original PSC entry.  TLM will therefore spend approx. $450m ( total $500m and take away $50m for Baranan ) to participate in Kurdamir and Block 39 ( Topkhana ) if they continue.  That is BEFORE they drill more wells and before they make money.  If this is correct then the following amplifies matters;

Given that at a guess that the Kurdamir block has 60% of the combined K-TK field and Topkhana 40%; TLM's interest totals 40% of 60% ( K ) and 60% of  40% (TK ) giving 48% ( 24%+24% ) of the combined mega-field.  If they continue they will have spent around $450m to participate in K-TK.  Taking this as a metric then WZR with 40% of 60% of K-TK ( half of TLM's total ) values them at around $225m or 56 cents ( 225/400 ) per share.

This is based on TLM's participation COSTS for K-TK field.  The comfort to WZR LT investors is that TLM may soon place a 'guaranteed' value on WZR's Kurdamir alone of around C
.6 per share and this would imply ( IMO ) a base value of C
.90 per share on WZR if Garmian were added.  There are very few E&P juniors that would be able to display such a virtually copper-bottomed downside limit.  A further observation is that TLM's management are very 'risk astute' and would not commit $450m in the current environment to make a few $$.  The upside for WZR investors if TLM decide to continue with Kurdamir is IMO very considerable as it will have been backed by the deep professional judgement of a 'minor-Major'.