RE:RE:RE:RE:RE:RE:Financing optionsThat would be a dream deal at this point waitingstill.
We also need to remember Apache was producing ~450,000 boed back in 4Q 2019 and had a market cap of close to $10B USD. Apache in theory could have drilled these past four Suriname wells by themselves. They knew, however, that having long-term captial was critical to actually seeing production occur (likely 5 years from now at a bare minimum) and most importantly seeing cash flow from these investments. In short, Apache was dealing from a position of tremendous strength when they inked there deal with Total.
CGX and Frontera have a current combined market cap of ~$300M USD (less than 3% of Apache) and Frontera only produces ~45,000 boed (10% of Apache). We also exist in a highly supressed market world due to Covid-19 killed oil/gas prices and have left most companies with massive debt. In short, CGX/Frontera are dealing from a position of tremendous weakness for multiple reasons.
My hope: CGX (and really Frontera via shares) sell 50% of their WI in Guyana to a large IOC/NOC, leaving them with a minor 16% WI. In return, the IOC/NOC will provide a free carry on up to 4 wells in Corentyne/Demerra. Least this way wells get drilled and we get to see what really exists within our land blocks. Without this, these wells will never be drilled.
* If the wells prove successful (i.e., have economic volumes of oil), CGX then could be rewarded with say $100-200M for there past efforts in obtaining seismic, etc. This to me is realistic and practical.
Challenge: Say it costs $3.3B to produce 100,000 barrels/day (using yesterday's Exxon JV costs), CGX would need to pony up $528M as part of their 16% WI. Good luck finding that kind of cash, even if they were given $100-200M as part of a 'bonus' for having successful wells. Least however CGX would have some leverage and could sell there 16% WI for some sort of premium.
See what happens. Oil_Run yesterday mentioned Frontera is having multiple talks with potential JV partners. Let's really hope they finally make a deal. Definitely goes to show that all those years CGX wasted doing absolutely nothing when IOCs/NOCs were actually spending good money just to enter basins (let alone drill) has certainly hurt us badly. Certainly the problem when valuable assets and opportunities are entrusted to a bunch of rubes who are only interested in lining there pockets.