AFRICA OIL - ECO ATLANTIC ALLIANCEGood points mentioned by those on the board - would add the following comments / question.
Africa Oil (Keith Hill) has invested $20M CAD for an effective 18.8% equity ownership in Eco Atlantic. Recall, Eco holds 15% interest in the adjacent Orinduik block which (according to some analysts) is valued around US $3.333B.
Discounting Eco’s Namibia assets - Africa Oil’s net investment in the Orinduik license (by way of their 18.8% equity interest in Eco) is around ~2.82%.
Following a similar valuation / transaction - would CGX consider divesting ~6% in one of their licenses for ~$40M CAD?
I do agree with waitingstill - given recent success in the basin - Frontera/CGX looks like they are willing to accept the risk/reward profile and would be eager to move forward on their own. Unless (however) they were able to receive a deal they simply could not refuse... As a CGX shareholder - I applaud their bold approach.
Outside of the above - believe CGX’s 2020 two well program will likely test more than 500mmboe. Probability of success for this upcoming campaign (provided CGX/Frontera are pursuing play types that have already been de-risked and are validated via near by discoveries) - could be at or above Tullow’s ~40% probability of success.
The reward (upside) here is in the billions of dollars; multiple valuations at play here for both CGX and Frontera.
Extremely exciting times ahead for us CGX shareholders. We still have some near term key catalysts in both Apache and Repsol.
Said another way - if you believe the basin will continue to deliver success - then the longer our prospective partners wait - the more they will have to pay. Same goes for prospective CGX shareholders (institutions, hedge funds, and big money managers) - the longer you wait, the more you will pay.