Renaissance Oil Corp. RNSFF

What will Amititlan contract look like after Migration???

[Boots333]

With respect to the comments of onedaylate to my earlier post that I, somehow, was being stupid, foolish or misleading about the idea that ROI could end up with as much as 62.5 % of the revenue after royalties when the contract migrates, I would state that I considered and have been considering where these contracts will end up or what they will evolve into as this is critical to my investment decisions about ROI.

 

When the current contract migrates, to a Contract for Exploration and Extraction,(CEE) it will likely be a Joint Operating Agreement (JOA) between the partners, Lukoil, Renaissance and Pemex, with very limited royalties. There will likely be a period where Lukoil and ROI carry the Pemex expense portion. This will be a new contract. This is why I considered that ROI will receive up to 62.5% of the revenue after royalties having put up 25 percent of the cost of drilling. The New contract is not likely to consider what has happened prior to the date of the new contract as that would complicate matters and Pemex and the government are trying to simplify the contracts. The current service contracts are very complicated and full of difficulties. Rather than the new contract being a joint venture between Lukoil and ROI with them paying a royalty of between 7.5 % and 30%, I would expect it will be a contract where Pemex retains a 25% to 30% interest, and Lukoil and ROI have the balance of the Joint operating agreement on the 37.5% and 62.5% sharing. Roy has indicated they likely will not be getting full cost recovery from the current exploration and development costs being incurred as they will be put into the next contract for better terms. I would expect Pemex expense portion will be carried because Pemex is hugely in debt and has limited exploration funds.
As Renaissance says on its website, it has the option to "increase Reniassance's position to 62.5 % of current partners interest".