Ann: Operations Update, page-54

OW, I would agree that YG and WB are small change relative to Icewine. They do however have the advantage of different source rock (as you say). And in the case of WB the ‘temporal imminence’ gives it a disproportionate prominence in the list of potential SP catalysts. YG may also earn a disproportionately high profile in that list due to its relative ease of being packaged as a play for further appraisal/development - due to its size and its location.

But coming back to the big dog - Icewine. You make the very important point that the conventional and unconventional prospects identified and being actively chased, are from the same source rock.  And hence, while the company is pursuing the farmout of conventional and unconventional as separate exercises on separate timetables - major geological uncertainties and questions may bring these two together. 

In my mind I saw the more likely (and perhaps more preferable) scenario as being a conventional farmout along the lines of my earlier post with a tier 1 player - perhaps ConocoPhillips - which would also provide sufficient funds for 88e/BEX to independently prosecute a summertime 2H drill and flowtest. I would not be surprised if the conventional farmout came with a first rights option on the unconvenional, but clearly needing more data than has been yielded by 2V. So potentially having the entire Icewine acreage farmed to the one player, but over stages. Somewhat consistent with the earliest examples provided by DW of “curve creaming” analogues.

That is not to dismiss the possibility (in theory) that the concerns of potential farming majors is along the lines of what you raised, and that they will only commit to a smaller scale farmout that targeted the reduction of the source rock risks and related GOR concerns, before optioning a larger deal. My gut instinct tells me that company pronouncements of discussions/negotiations on potential farmout mean that this is less likely than the scenario painted in the preceding paragraph. But this could happen.

So, in that sense, the first farmout, if it is to a major player and on favorable terms, is truly a potential company maker. However, I wonder whether much intrinsic value (relative to value of proven play) will be generated by that announcement, irrespective of its nature, at that time. Perhaps the market will join the dots and see the unlocked potential now being a few steps closer - and reflect that in near term speculative value. Just for Icewine.

Frankly, I think it is worth waiting, if necessary, for the right deal with the right player unless it is evident that it is not forthcoming.  Thankfully we have unrelated catalysts in WB and YG to keep shorter term investor interests, ticking over in the meantime.

All IMO.  GLTA.