RE:RE:RE:RE:RE:PresentationI would not consider a farmout in Khazachstan as totally beneficial to CPI at the moment.
To maximize the value for cpi shareholders (payment sum + explorer commitment) in that kind of deal you need to act from a position of strength = being cash flow positive and significantly increase production volume from the shallow wells at Zharkamys first.
I think it is wise to bring the turkish asset into production first (mid 2017).
Their 28 million cad working capital should allow to fund the gas pumping station and the pipeline by equity. With the weak try currency right now think it is hard to get a valuable loan deal at the moment.
Cash flow in h2 2017 should then be sufficient to fund the drilling of the 4 shallow wells at Zharkamys. If these proove to be successful CPI can hopefully do a farmout deal in 2018.
Major concern for me right now is the weak try currency. i do not not if this will have an impact on the streaming deal with Botas. The pricing reference from VLE is from march (10 $ per mcf), now it is more like 8 $ per mcf which of course has a significant imput on CPIs future revenue/cash flow. I think the turkish state owned gas companies aim to keep energy prices flat to battle the rising inflation from the weak try.
2016 year and is nearing and CPI still has to report the following milestones:
-drilling results from the poyraz west 5 appraisal well
-flow test results from poyraz 3 and poyraz 5 wells
-sales agreement for the turkish gas -> impact of try currency? currency hedge possible???
-credit facility still an aim to fund the ongoing work at poyraz?
kind regards
gulliver