It is customary for most resource companies to be able to carry forward their exploration and other related costs, and get to use them as future tax credits if/when they turn a profit. This is the case with Guyana and IF those tax credits can be transferred to a new owner, I would think it could only be done with a FEC sale and not a Frontera Guyana sale. And if so, and you can add the Guyana exploration costs of both CGX and FEC, the potential future tax credits far exceed the current market cap of FEC.
Add to that, if this production agreement can be transferred to the new owner, it is surely far more favorable than what they are proposing in the upcoming oil concession auction. Plus, they have $100's of mm's worth of data and the play will likely be almost completely unrisked soon, if not already. I try to stay away from reading this chit as I am super overloaded and keep adding like today. We are near the 52 week low and if they are manipulating the price to keep it low, if you are bullish on this one, go for it and take advantage of the manipulation. I see no way there are not multiple bidders on this. Just my worthless .02.
Fluids Doc mentioned China as a potential buyer, I wonder if CNOOC were to take out FEC solely, if they could cut a deal to tie the block into the XOM et. al. infrastructure greatly reducing future development time and costs?
CGX production agreement a 53/47 split - Guyana Chronicle