Originally posted by HAC30
Ohhhh, I see what you did. You added up all their targets, including ones across multiple countries and compared this to a single well target of another company. Kinda like how people use in-ground value to promote companies that can't get their product out the ground cheap enough.
Once isolated, the respective targets in Cuba are far smaller. The farm-out covers 3 wells but as you can see below to comprise that prospective number there are a lot more than 3 targets. They say their 3 main targets have a couple hundred mill BOE combined (far less than the one target for IVZ thus far).
The beehive target is good size and could be good if the data comes back promising (due around same time as IVZ) but as mentioned, they only get 20% of that if Santos or Total choose to drill. Drilling would probably take place at a similar time to IVZ. If it was onshore, and drilling was therefore a lot cheaper, they probably could have retained a higher % of ownership in the event drilling goes well.
Yes I added all their p50 together.......it was and is the point about the value of prospective reserves. They have had to farmdown to 12.5% but they get a whole lot of spending done for zero risk.
IVZ have a very long way to go before they even get to the farm down which will cost plenty in WI IMO for a well in complete wildcat territory.
I have had a preliminary google for a Zimbabwe product sharing agreement but can't find one, happy for someone to point me to it. I hope one exists because if it does not then good luck getting anyone to farm in without a regulatory framework in a country where the leader does not know what a prospective resource is.
As I said IVZ may turn out to be the biggest discovery ever but you won't know that for at least 18 months, and most likely much longer when a well is drilled, their option expiry date in 2021 for drilling is there for a reason.
You can then draw other conclusions about the actual $$ value of BOE as apposed to BBL which block 9 is.
Aimo DB
