OilGoldGas
It all depends on what view the market takes on the Longhorn & Ipenema acreage pre-drilling. You could be right. After adjusting for shares in issue, acreage and WI on Longhorn (diluted 25%) and Ipenema (30%), equal reserves prospects in quantity (recoverable) and quality suggests that AUT = 3 X ADI.
As to the dilution by Hilcorp - I've said the same myself. Hilcorp will be footing 50% of the costs running forward after the free-carry wells. It's far less of a strain on the company's cash resources for the first few wells. Hopefully, the development will be self-funding after that. Speed of development is important because the leases do have to be drilled.
It's going to take years to fully develop the acreage if 100 acre spacings becomes a reality. That's about 500 wells on Sugarloaf and Longhorn together.
More than enough to keep 10 rigs happily engaged. Can't really understand why Hilcorp is trying to lease much more acreage. 1,000 acres might be 10 wells (if they have time to drill) but might cost $??? in rents a year (now).
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