RE:RE:Q1-2021 FRONTERA EARNINGS CALL I definitely see your point Oil_Run to different aspects you highlight. Couple thoughts:
A) Apache had a market cap of ~$9 Billion when they spudded Maka-1 in Suriname. Frontera currently has a market cap of ~$500 Million. Completely different financial scenarios. Frontera might have a great land position, but their financial leverage is a joke compared to the other big name companies in Guayan-Suriname at the moment.
B) I will play a potential JV devil's advocate here (and something I do believe is playing out)... let's say both companies do believe there is oil and its a formality to drill. Why would the JV partner pay any premium at all? Especially if Frontera considers it a formality to discover the prize? Yes, Guyana is a wonderful opportunity but its not like its the only game in town for international companies. Instead, the companiy is probably letting Frontera do all the up front work....Everyone knows Frontera does not have big money pockets to develop the field once Kawa-1 is discovered on their own... they still need massive help financially. Even a $1B Frontera share rise wouldn't do the trick. If anything, my guess is the potential JV partner will allow Frontera to take all the risk here with drilling (safety, completions, costs, etc) and once they discover the oil, only then go along. I do not see any premiums being paid out.
*** And if the discovered resource is not as big as anticapated (still very possible), Frontera is left holding the bag and we long-suffering shareholders are up sh*t creek with our CGX stocks.
Frontera also played CGX for the past couple years and literally got the entire Guyana play to themselves for literally nothing (lets be real). But now I am sure other companies are looking at Frontera and not giving them much help either in negotiations (if anything playing the same game Frontera played CGX with...)! The tables have turned and it will be interesting to see how it all plays out in the months ahead!
Cheers (and thank you for your posts Oil_Run... I enjoy reading them a lot.... just offering my thoughts in return).