Simba verses TaipanI posted this on the SMB board and thought I'd also post it here:
Taipan's market cap is 25 Million
Simba's market cap is 17 Million
Taipan has 3.55 times the acerage onshore Kenya
Taipan has estimated total net prospective resources of 328 million barrels of oil equivalent
Taipan signed a farm-out with Premier Oil plc of the UK on 3rd October 2013. Under the terms of the transaction, Taipan will retain a 45% interest in block 2B and will continue to be the Operator.
Premier will earn a 55% working interest for a gross investment of up to $30.5 millionTaipan is fully funded through the drilling of the first well on Block 2B
Simba announced on May 13th, 2013, that it has signed a Memorandum of Understanding (MOU) with Ajax Exploration Ltd., a private oil and gas exploration company. As per the MOU, Simba will farm out a 66% interest and ownership of the Block 2A in Kenya to Ajax for a gross investment of US$36.5 million.
The NI 51-101 Resource report (presently being updated) completed by Sproule Associates Limited concludes that Block 2B has mean un-risked prospective resources of 410 million barrels oil equivalent within the 17 exploration leads identified thus far.
Taipan holds a 20% interest in Block 1 and Afren is the Operator. The block covers an area of 22,711 square kilometres and lies in northeast Kenya, bordering Somalia and Ethiopia. The presence of an active petroleum system in the area is clearly demonstrated by the Tarbaj oil seep located on the southwest portion of Block 1. The northern portion of Block 1 is an extension of the Ogaden Basin that in Ethiopia, contains approximately 4 trillion cubic feet of natural gas resources. The prospective sections in Block 1 are expected to be oil prone as demonstrated by the Genale oil seep and the El Kuran light oil discovery in Ethiopia. Based on current data, the partners estimate gross prospective resources on Block 1 to be 715 million barrels of oil equivalent.
I took a position in Taipan as it is currently fully funded to drill in both blocks next year and seems like a much safer bet. Furthermore, the MOU with Ajax Exploration seems a bit odd and no binding contract has been announced.
How would you compare an investment in Taipan verses Simba at this time?