RE:RE:RE:RE:RE:SEPT-09-2020: SHELL ENTERS GUYANA-SURINAME BASINFantastic points as always oil_run.
Your last sentence "I can guarantee you, Frontera (de Alba) is not going to give away their crown jewel (the company's prized asset) for pennies on the dollar" is certainly an interesting perspective. Couple things that pop into mind:
i) Once an extension is given (will happen), what is the time frame before a well is required from the government? Fall 2021? No guarantees oil picks up significantly before this new deadline and its very plausible no JV is signed before then. What happens at this point? Does the government give another extension or will they finally make CGX/Frontera man up and doing something for once? We already deal from a position of weakness (least financially, why else look for a partner?) and other companies know this.... wasting another year hoping for a white knight JV partner definitely won't help, no matter how much Frontera values their land base in Guyana.
ii) How long can Frontera keep being squeezed on the stock market (already at record lows) and associated daily production (down 40% from Dec 2019) before something drastic happens? As much as I would love to think Guyana would be negotiated on its own merits, I guarantee external companies look at the entire company situation and will use this as leverage in any talks (who knows, maybe Frontera offers up Guyana land and the other JV company will take on some less desirable Frontera lands elsewhere?).
Either way, Corentyne is definitely a jewel with fantastic upside. I just hope Frontera does not blow it and watch it dwindle away because of poor decisions/greed/hopeful fanstasies regarding JV parnters and oil price rebounds. CGX already has done this countless times.