Excellent deal with AOI! 1. ECO goes down 1% gross in 3B/4B, but gets 16% bigger share of the remaining 5.25% than they had of the 6.25%? So, net in 3b/4b? :-)
Some math from another post in London:
"ECOs change % in 3B/4B
Assume 4 billion BoO
A 6.25% -> 250”
370,173,680 shares-> 0,675 BoO/share
B 5,25%-> 210”
317,231,936 shares -> 0,662 BoO/share
Difference -0,013 BoO/share"
2. Quite obviously, AOI values 1% in 3B/4B so highly that they want to do this deal now, at a low share price in ECO where, for example, management notes in the press release: "Eco was encouraged to note the recent news from neighbouring Stabroek block, where the operator, ExxonMobil, is planning for a seventh development at Hammerhead." A farm out to be closed.
Reasonably, AOI has other business plans that cause them to rush this deal.
3. Guyana, Namibia and the new block in the Orange Basin overnight became worth 16% more, not in absolute terms on today's date, but for every new increase in value that happens there in the future.
How can this be misunderstood in Canada? The AOI exit is gone from the table seen as a risk, replaced by a strengthend part of our portfolio in Guyana, Namibia and Block 1 in Orange basin due to less dilution.