Comments on the price I have a few comments on the price fo the sale - namely $32 million for 19.9%.
I can see why at first glance this seems to be a poor deal compared to KRN and IC Potash, who got more cash for the same percentage. However, I think there are some differences that are worth pointing out.
For starters, WPX got a huge offtake from this deal, and the offtake is valuable to WPX as it will help with financing. The investors know that the large offtake offers value to WPX and can therefore negotiate a lower cash price.
Secondly, in this case the investors bring more to the table than even the cash and offtake. A CNOOC subsidiary has much deeper pockets than just about any entity that could have got involved with a potash junior, even more than Gujarat. Having CNOOC on board will make financing for WPX easier, either by getting more money down the road from CNOOC, or just by affiliation when WPX makes proposals to banks. Since this again offers value to WPX, CNOOC could have negotiated a better cash price.
The correct way to think of this deal is the following: the offtake plus the affiliation with a major Chinese state firm is what is valuable. The cash portion is only relevant in that it gives WPX all the operating capital it will need for the forseeable future and it shows that the investors are willing to put some skin in the game. And by these metrics, the deal is great since the investors are golden and the offtake is the biggest we've seen among the juniors so far (almost double KRN's by tonnage).