Let's face it, in this game, and especially in the offshore arena, if you are not cashed-up ($50m+) like a AWE/ORG/AED you must be holding something of strategic value. In the cash of EPR, it certainly is not the cash but P46 and P50. EPR will not let P46 go for a song and nor should they. JR has spent too many a night toiling away at surveys and analogous fields to see the dream be sold at short money. I am with EPR on this one.
They have 43 days and counting. BPT will need to announce results of what is has been a significant cash spend, even for them, to the market well within that time, if not today or next week. It is in BPTs interest to announce a discovery to the market, even for their own investors, bankers, etc. As operators, having EPR non-financial is a burden but certainly not a show stopper! The relationship will certainly not suffer and the team at BPT know too well of the financial situation that EPR are in as they have seen it a time or two! BPT may delay the result but if they go to production test, it’s a sure sign that there may be a resource in place.
JR and the team at BPT have worked together truing up drilling locations and analysing surveys on this permit. It must be a hard thing to say to a JV partner that I appreciate your input on this, but need to invoke the JV agreement. Anyway, warm sentiment aside, if the Fermat-1 is a boon, BPT would gladly stump-up the rest of the money. In EPR's case, the.
How would EPR eventually pay? Capital raising - Not enough time, SP would recover significantly. (if one wanted to sell, a spike in SP is the time) Debt - 'Nothing of value' acceptable to a bank to collateralize. Farm-in partner – Yes, Yes, Yes, Yes, Yes! Capital raising to strategic farm-in partner - Certainly yes if the farm-in partner thinks that P50 will be better than P46.
To get the farm-in partner in the first place, EPR would have been pants down discussing all merits of the offshore permits. The farm-in partner knows what the stakes are. A win at Fermat-1 would go a hell of a long way shoring-up the hypothesis.
I would bet that the farm-in partner would have another look if Fermat-1 is a confirmed winner. Under continuous disclosure, BPT must make announcement ASAP if Fermat-1 is a dud or otherwise.
EPR is a the cross-roads like I’ve never seen it and as I see it and holding a decent hand. There's been many a player before them (WPL and the NWS)
I am not buying at the moment but definitely not selling either. Hold if you can.
Good-luck to all holders!
EPR Price at posting:
2.5¢ Sentiment: Hold Disclosure: Held
