They diddo seismic as part of the IW2 well design. they acquired 2D in-line extracts around the FB well pad from the pre-existing 3D Speculative Seismic that had been conducted on the acreage by SAE. You can reference announcements on this in mid to late 2016.Should they have spent millions more at that stage and bought the full 3D? I don't know. Very hard to justify at that time if 2D could give them the indications they were seeking.
There was considerable discussion and critique by us armchair experts on the switch from H to V for the IW2 test. The primary rationale provided was risk minimization as they were uncertain at which level to go horizontal and were worried about sub-optimal flows in that event. Money saving being a fringe benefit. While I wasn't thrilled, I accepted it as the prudent approach...particularly if PB had uncertainty on where to go lateral. Would staying H have made a difference...I don't know. Do you?
Of course PB knew the risks were high and it was possible it wouldn't work. The more pertinent question is that is there anyone who didn't realize that the risks were high and that it was possible that it wouldn't work? And is there anyone who didn't realize that failure of an event is the manifestation of that risk? PB also (allegedly) said that failures were the eventual route to success in the world of exploration. Some analogy to Thomas Edison, if I recall correctly.
Are there real risks and concerns if we don't get a FO (or JV to keep it in your lingo) soon for either or both of the IW prospect plays? Yes. Possibly existential risks. They are real. I suspect most rational investors get that and hence the heightened nervousness even without the context of 2V and Winx outcomes.
Do we have any evidence that credible JV offers have been put to the BoD? If it had been a credible offer (as opposed to casual chat), wouldn't the news have been material enough to announce? Especially for a BoD that seems inclined to push positive news or put a positive spin on news? I don't buy that a credible offer has ever been made because I don't believe that we have had the data (aka acreage de-risking) to entice anyone credible, until recently. IMO only and happy to be swayed by evidence to the contrary.
The Winx consortia could have tried to drill Bravo or Charlie instead of Winx?....True. In theory. However, I don't think OEL would have been in it as they were trying to rescue a stranded asset that they already had a stake in. They brought RMP to the party as a company they had previously partnered with. Let's be realistic, the allure there was proximity to Horseshoe and the possibility of getting in on the Nanushuk agenda that was dominating the North Slope. For a relatively small punt of about $6m. Definitely a 25% "gamble", and one that may have betrayed weaknesses or lack of confidence elsewhere....but just our $6m alone would not have achieved anything on Bravo or Charlie, other than perhaps the required 23-27 mile ice road. Gamble failed. Impact on sentiment is worse than impact on cash balance. Impact on lost focus from IW negotiations may be greater. I have no illusions on that.
The narrative is there, because that is what it is. I am not sure it is about "liking the story" or disliking or even disbelieving the story. It can't be a black or white thing. It is a warts and all story and it is what it is. It has parts that are less likeable than others. The question is...is it a credible story? Is the dream of unlocking the wealth in Icewine still plausible and can this team deliver it for these shareholders? I have increasing questions and concerns, but on balance of probabilities am still inclined to hold. Not sure I would be jumping in as a new investor at this time. But a fundamental catalyst like FO is now essential. For the company. For LTH's like me to stay around. For new investors to be attracted. No advice proferred in these statements. Everyone needs to decide for themselves as risk remains very very high. IMO.
It is possible to "like the story" or just invest in the story, without being enamored by the self-remuneration decisions that the BoD continually makes. I have had my piece on this publicly on this for a prior to the 2017 AGM, and have engaged DW quite robustly on it. And he engaged me back equally robustly. As I suspected, it would come back to bite him as the package was all about enjoying the upside benefits (and some) that shareholders would, without any downside pain that shareholders would or could. The place to voice that concern is at the AGM. Resolution 1 is not binding. But can be used to send a message.
I can't help it of you interpret my comments as being blind or unquestioning faith in the BoD or the company prospects. I try and keep an even keel on the risks as well as the potential and espouse my sentiments accordingly. My limits are being severely tested, but are as yet uncrossed. As I have repeatedly said. The FO is the clincher. If "good" and "timely" then game on. If "poor" or "absent" then likely game over. We should hopefully know prior to AGM.
All IMO. GLTA.
88E Price at posting:
1.5¢ Sentiment: Hold Disclosure: Held
(20min delay)
