Post by
Lonegaurdian19 on Aug 29, 2023 12:06am
Royalty model
I know Gil's been at this for over a decade. To his credit he called Guyana and Namibia long before most. In looking at how Tullow formulated their deal I do have respect for the Royalty they included (and nothing else as Tullow is a dumpster fire)
I wouldn't be upset if ECO forewent a couple million if it secured a royalty between .5 - 2% in a farm-down.
my rationale is ECO will unlikely ever get to first oil on these prospects. While not impossible, that never seemed Gil's intent.
what is interesting is the future value of a royalty stream is monetizable. If it isn't monetized immediately it could become a royalty trust.
If Eco, assuming massive discoveries couldn't afford a future FPSO which would you prefer:
Farm down for $10 million then sale to limited players in the game.
Farm down for $7.5 million with a 1% royalty, then either a sale to limited players in the game with or without a future royalty stream.
just food for thought
Comment by
argaiv on Aug 31, 2023 11:54am
Royalty stocks seem to do well based on previous experience in the mining sector. Let's just hope for some drilling success. Then they have to determine what they have assuming we see drilling success. GLTA