RE: RE: RE: RE: RE: RE: It's time to chill out fo
Email from Mark,
Reads as follows:
As you are probably aware the company is actively pursuing a farm out (or joint venture) partner to help Simba complete a full scale drill program in Kenya. The process is moving along nicely and there have been over a dozen companies that have signed and are analyzing the data, with another 6-10 companies on deck waiting for access.
It is very difficult to estimate the costs for a drill program at present however Jim D, Simba's CTO and Senior Geologist thinks that Simba may be able to drill the first well for approximately $10-20 Million.
The importance of a partner cannot be understated. There are a number of factors that need to be considered such as the percentage Simba will give up for a partner, how much cash will be included and of course how much capital a potential partner will allow for drilling.
If Simba can secure the right partner and the right deal then a good portion of the costs to drill may be alleviated. This is what makes this whole process so crucial.
Simba will need to address funding in the next few months but a private placement is not currently being planned. There are many other avenues being considered but the joint venture/farm-out may hold many of those answers. As an example, you may have seen recently that Marathon Oil farmed in to Africa Oil's block 9 in Kenya for approximately $50 Million. That was for 50% of that block which included $25 Million in cash and another $25 Million in work (drilling) costs.
I'm not saying Simba will receive those kind of terms but if Simba is able to secure a decent arrangement, many of the costs associated with drilling will be taken care of.
I apologize for being somewhat vague, many of these answers will be revealed in the new year and management is confident that Simba Energy can reach the best deal possible for the company and its shareholders alike!
Please don't hesitate to contact me if you have any other questions.
Best regards and Happy Holidays!
Mark