CGX Energy Inc V.OYL

Drilling info

[waitingstill]

Dirk - do you have a rough estimate of how many meters per day is common for a drill like this? Also, do you expect them to drill to target depth and then go back and test zones of interest or will they stop at each zone of interest, test, and then move forward? Obviously looking for the typical situation as I know you won't know what CGX is going to do specifically.

[Dirksidetrack]

ROP (rate of penetration) varies. Tophole is usually very fast. Unconsolidated sands, silts, clays. They ususually control drill that so as to avoid deviation. Maybe 15 to 20 meters per hour but could drill much faster if they put more weight on bit (WOB) but don't do it in order to avoid deviation. Otherwise they could go off course. Bottom hole is slow usually 1 to 2 meters per hour

[Dirksidetrack]

I've got a question for you, if you don't mind. Why are you guys not worried about share dilution? They could find 500 million barrels and issue 200 million new shares. People talk about the possibility but nobody is concerned about it. Maybe because justified dilution would be welcome? If they could raise a few hundred million to finance a multi-well drilling campaign then why not?

[CLOUDER]

THAT is exactly what FEC is going to do at 97 cents a share,this is the amount agreed upon, look it up.       4 months to drill a 2 month hole,    yup.  NOW just imagin a dry hole,   30 cents to nowhere. I have seen this a time or 3 being in OYL.U  and OYL for about 2 decades.   and do not forget that there has been no economical oil

[Dirksidetrack]

Wow! 21,000 foot well in over 1000 feet of water is in the shallows. Ok. Smh. And why would fec dilute at 97 cents when they own 220 million CGX shares? Kind of like scoring on your own net. Nope I don't agree. I keep on talking about my finamcial accounting book. Here is what it says: new share issuance is a very common means by which companies raise capital. The other way is to borrow the

[IceDog13]

Dirk... about that balance sheet. One thing that is not public (and it should be) is how this well is being paid for. CGX is responsible for about 60 mil to pay for the drill. With a balance of about 10 mil in the bank, they have made some kind of a deal with FEC to cover the costs. What that deal is, nobody knows. Corporations are not known for their generosity though, so I am fairly confident

[Dirksidetrack]

Yes my book gets a bit into using stock options. It says "Stock options can be important features of complex capitalization arrangements." But discussion of such arrangements are left for more advanced courses. The book that I have is introductory level so I can't parse from notes 13 and 14 in CGX's last financial statements of June 30, 2021 on what exactly is going on there. But

[IceDog13]

It is funny how your post comes across negative, and then you throw a number like 30% chance of success at the end. This is a wildcat.... 30% is a huge number. Derisked due to other nearby discoveries, but a wildcat none the less. CGX has not shared enough info to put a COS on this, personally I pencilled in 35%.