CGX Energy Inc V.OYL

Rough Numbers

[SportyJ]

We get "carried" in Wei. Wei AFE is $93m. 93x.32=$30m. We get $29m to clear kawa etc. We get loan forgiveness of 19m+35m+3.8m cash=$57.8m. So $30m+$29m+$57.8m= $116.8m for giving up 34.667% of correntyne. I admit rough numbers. All imo.

[Miftee9]

Sporty - The alternative was we get taken out at whatever price per share was given in cash and loan forgiveness and no upside. This is a great deal given the fact this company was essentially bankrupt. Cash is king. Again. Downside $1 upside $10. That's a good bet. GLTA. 

[SportyJ]

Miftee, my friend, I agree with you. I'm thrilled the financing is behind us! I was just putting some numbers out there from my interpretation of the PR.

[Dirksidetrack]

So what are you thrilled about Sporty? Corentyne is supposed to have 4.5 billion recoverable. Hess said that total E&P costs plus royalties are about $35 per barrel. Or in other words gross profit = contract selling price of oil minus $35.So let's say that the 4.5 billion in Corentyne creates $30 per barrel in gross profit. So we're talking almost $135 billion gross profit. Oyl just

[waitingstill]

Yes, unexpected events can occur. To some extent, that has been factored in. Wei is projected to cost $90mil from what I recall. CGX is carried up to $130mil so they have put a $40mil buffer in there. So I think that does cover some of your concern. Yes, they could totally eff it up and then we are in trouble but that is the risk. But, as you said, usually that happens in wildcats and I don't

[SportyJ]

Dirk, fair enough. Many "hedged" cgx by investing in Fec. Many figured it a reasonable idea to be aligned with Fec/DeAlba and not solely with cgx. Many therefore are in good shape if it's a good or bad deal for either cgx or Fec. I'm cool with today's PR. Ultimately, though, the real prize depends on turning the bit to the right.

[Dirksidetrack]

Yes I agree Sporty. I can tell that you're oil patch from the jargon that you used. I'm hoping for more info to get out somehow but it is amazing, and I mean amazing, how tight info flow with these guys. I've never seen anything this tight in my over 40 years in the patch. It's all guess work and inference from an investors point of view. Will that continue through Wei? I guess so.

[SportyJ]

Dirk, "oil patch"? No you are way smarter than me. Never had to wash oil based mud from my clothes or boots. First time up the stairs to the dog house I grabbed the rails and got a hand full of grease. The rig hands got a good laugh. I woke the driller who was sound asleep. Asked him what time his tour started. He said about 30 minutes ago. I got a good laugh. I do love the oil business

[Dirksidetrack]

Sporty, The only time that I can think of when a driller may be having a nap is when they're logging. Dirty handrails a big no - no. Causes too many accidents. Yeah good luck to all. Not much will be happening until October

[Miftee9]

DIRK, apparantly outside of you, it appears everyone else knew we were desperate.  What gave it away, the fact we were millions in debt with virutally no prospective way out of it?   Yes, Management made many mistakes along the way (for over 20 years) and yes we did not get the deal we all wanted but the fact remains, somehow and someway, we were able to live to fight another day.&

[Ermosp]

What math gives us an upside of $10? 

[waitingstill]

Rough estimates indicate that we could have 750 million barrels if Wei is the success they expect. That is 250mil net to CGX. At $6USD in the ground, that is $1.5bil USD / 300+ million shares is roughly $5USD/$6CAD per share. In addition, "mean" third party estimate for North Corentyne is 2.2 billion barrels so successful Wei would derisk those barrels and that could push the SP to $10

[IceDog13]

Where are you getting the 750 million barrel estimate? I have not seen anything from CGX or FEC to indicate the potential size of Wei. Is this a number that was released from either company, or just your estimate?

[waitingstill]

Sorry, just my guess based on the Kawa experience and what is posted on seismic. Also, I am giving Kawa 150 mil barrels and Wei 600 mil. Again, just my WAG.

[IceDog13]

Thanks. It really is to bad they have not released a 3rd party CPR of the estimated size and COS.

[waitingstill]

Also there is a 3rd party independent estimate (pre Kawa I believe) that had a mean of 2.2 billion barrels and max of 4.2 billion barrels for Northern Corentyne so I don't think my numbers are outrageous by any means.

[IceDog13]

Not outrageous at all. I would think on the high side of optimistic for Wei, but with the info they have given it could be larger still. With the lack of information I use much more conservative estimates, with Kawa <100 (not commercial as a standalone, but could be monetized in conjuction with other discoveries) and 300 for Wei. Pulling numbers out of my &#@, but if the numbers can make

[Mbxwatcher]

I think the downside is .58 USD *1.28 = .742 Canadian. .....and I think they just told us what they think it is. They got 214 million for 35% of the block or 6.11m per percentage point of ownership. 6.11 X 32% retention = 195 million 195/334.5 m. shares = .58usd tangible value. I believe this is the price of this transaction Upside: who knows...for sure the deal gets us a crack at the upside and