RE:RE:Frontera Market CapHi Sporty,
Couple things to your message:
a) Block 58... yes, I do think its been a success. Apache/Total have done the smart thing putting appraisal wells around all their exploration discoveries to understand reservoir OOIP limits. This in turn will minimize risk with future production wells/FPSO.
* This is what smart companies do! I think too many people figure a exploration discovery can go into immediate production within a 3-4yr timeframe. What Exxon did with their Liza discovery is a massive anamoly. Most offshore examples historically take a least 8-10yrs from discovery to first oil, at a minimum.
b) FEC may be undervalued to a small degree because of Columbia. However, other Columbia based operators have not seen their share price stay flat in 2022!
* I truly think FEC stays flat because investors want to see a meaningful return on the Guyana investment. To date, Frontera has pumped a hell of a lot of money into CGX stock, Kawa-1 well, 3D seismic, etc... and have nothing to show for it! Ok yeah, Kawa-1 discovered oil/condensate... big deal... is it economic? No one has any idea, and investors are not happy about that.
* With Wei-1, they need a massive economic discovery oil oil...too many investors, this well is like a $500MM USD gamble. All this free cash flow money pumped into Guyana for these years could have easily been returned to investors through dividends/new production wells in Columbia, etc. Instead, Frontera has taken a massive gamble on Guyana and do not have anything to show for it at the moment. That's my honest opinion. How De Alba et al proceed forward will be interesting... but like I mentioned months ago, they are in full gamble mode with Guyana with the current strategy. Will it pay off or not? Investors are cold on the stock I think because of that!
* And let's say Wei-1 does not hit economic oil... will Frontera investors want to see them pump another $100MM USD into a third Corentyne well/spend more money taking out CGX stock for greater WI? I kind of doubt it.