I think that owners of FEC are Lucky(warning long post, and based on nothing other than my usual less than .02) that the company is controlled by the Vulture Capitalists led by the Pitbull of Business. Their goal is to maxamize their profits for their long hold of FEC shares. Their profit is also going to profit FEC shareholders. Had FEC not been controlled by Catalyst (CC), there is no way the company would have been recently divided into at least 3 saleable parts. How often does a CEO or Chair of a public company who is is making big $$$, decide to just sell the public company paying them well and end those big paychecks and big perks?
FEC has floundered since before it was taken over, with the situatiion in Colombia seemily to be getting worse for O & G companies. FEC inherited a large number of CGX shares when they took over PRE and I sincerely doubt that FEC (without CC control) would have seen the opportunity of taking over a small $$ distressed, poorly managed company (CGX) but with large concessions in the G-S basin. But Vulture Capitalist work often using debt to their advantage as they did with PRE. So, over a period of 2 or 3 years, using debt, they have ended up with about 77% of CGX shares, 68% of the C block concession, and both the Chair of FEC (The Pitbull) as co-chair of CGX, as well as the CEO of FEC both now members on the CGX board. So, CGX is a completely controlled subsidiary of FEC. CGX has no money, and is in debt as usual, with no way of raising money without CC approval and now CC has filed and received an appraisal plan that includes the Wei-1 well. I think only to speed up any sales process as they surely do not want to spend another $200Mil +/- or the time to drill a 3rd well. Plus they have had big money tied up in FEC prior to 2016 when taking it over as they had controlled much of PRE's debt.
So, all signs indicate that CC wants to sell everything and has set it up to have various options on how to maximize their sales price,
which should mazimize our share price. Obviously, we need a good well to have CC maximize their/our share price. I think clearly the quickest cleanest way to do this is for CNNOC to buy FEC outright. To do that, they and other potential C block bidders have to see big potential in the block. . Would the CCP want the 2 ports and the C block just to potentially have CNOOC gamble and seeming over pay early before a complete resource update and appraisal process? Who knows? Would Catalyst even consider a large bid for FEC before the complete appraisal process of the block is complete? If the Wei-1 is a good well and with it now being an appraisal well would CC want it flow tested and if so, would that delay any well information until the flow test is complete and maybe even longer. Surely, any bidders for FEC or Frontera Guyana are going to have access to information far sooner than us. I think this statement hidden in the CGX MD and A spells out that if a good well, the Wei-1 well results are likely to be delayed and SLB is going to be deeply involved with their advanced methods of well/basin testing much now based on AI.
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On January 23, 2023, the Joint Venture announced the Government of Guyana approved an Appraisal Plan (“AAP”) for the northern section of the Corentyne block which commenced with the Wei-1 well. Following completion of Wei-1 drilling operations and upon detailed analysis of the results, the Joint Venture may consider future wells per its appraisal program to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne block. Any future drilling is contingent on positive results at Wei-1 well and the Joint Venture has no further drilling obligations beyond the Wei-1 well. The appraisal programme was approved for a period of 24 months from June 29, 2022 to June 28, 2024, and designated an area of approximately 993.9 km2 ." Below they explain the difference between the 2 types of wells. This has become a real chess match between the Pitbull and potential buyers. I think we are lucky to have the Pitbull playing chess for our FEC shares. The Pitbull profits big if FEC profits big, so where does that leave our CGX shares? I think they can profit big, if basic news of a good Wei-1 well (or whisper good well news) regarding feet of pay, type of oil, gas, condensate finds etc are released. There is a 6/28/24 deadline for the appraisal plan. Any flaws or misconceptions to my rant please correct me as I don't know Jack Chit about oil wells, just what I have read.
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