re: Ann: Bullseye Prospect Sale of 8% Working... I was very...

re: Ann: Bullseye Prospect Sale of 8% Working... I was very surprised to see yesterdays announcement from GGP that they have sold 8% to IB Daiwa for as little as $1.5m. IB Daiwa were at one time major shareholders in Pantheon BTW.

In my view this sale has diminished value in the project (short term) to the other listed companies involved, Bullseye has in effect been marked to (depressed) market on valuation.

I estimate that at current oil prices GGP shareholders would have received around $500k ex costs a year (480 bopd from J1 current x $50 oil) from the portion sold. So make of the sale price what you will but consider that many experts suggest oil will trade higher later this year. At $70 oil that would have generated around $725k to GGP shareholders.

What is even more baffling is the consideration of only $500k on 8% of the Cib Haz? Surely this is a bit of a giveaway? Well it is a huge giveaway actually as it's not paid unless there is success. IB Daiwa are in a win win situation there.

As GGP are the operator at Bullseye it is becoming rather frustrating that more info is not coming out re costs of this project especially over-runs/delays etc. No further info on flows from J1 either. The range being 750 bopd to 450 bopd. What is it now and why the huge varience ?

I am curious as to why GGP needed to sell this share of Bullseye especially given the recent largish capital raisings.

I would suggest they are more concerned of their inability to raise future funds from their major holders so have passed a % of forward drilling costs onto IB Diawa if further wells are needed. Perhaps those large investors, who have already stumped up major $$$$ are seeking results!

Cap ex costs in the US are falling steeply, as much as 40% in some cases. I have recently spoken to a CEO of another company who informed me that rig hire (HP rig) that was close on $28k a day in September 2008 is now down to circa $16k and still dropping. These cost reductions are surely relative to Bullseye which makes yesterdays announcement even more odd on the back of the recent bond issue etc.

Recent announcements have also been rather sketchy in detail. From SONRIS there have been a few complications on J2, they have reached a critical depth currently.

Fortunately they seem to be doing the right things to overcome them and there may be a possibility they have hit a producing zone on the way down, hard to say 100% but do the research on the recent complication and one may see where I am coming from.

I would hope we get a more concise update on this project shortly.