Couldn't agree more Boysy, with Galoc production Wells coming in on time and within budget, cashflow is likely to increase strongly. Bring on SC 55 and we have a real thrill and drill!
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Certainly would be a lot of hype prior to drill we gotta get official clearance first then bhp need to get a rig sorted. One other thing to note the 12k bopd looks likely to be exceeded which would be great as long as no formation damage happens as a result.
Looks like sc 55 approval is about to be granted ball seems to be in bhp a court
http://www.asx.com.au/asxpdf/2013102...5227qv0nf3.pdf
Otto currently in a halt pending resource news in East Africa...exciting times with:
Successful Galoc 2 development and gross production of 12k bopd.
BHP handing back 60% of SC55 and paying Otto $3m cash plus $24m on drilling a well...what a result given the situation
EAR basin heating up..look at SWE share price lately.
Could be an interesting week for OEL shareholders. I am not going to speculate on the reasons behind the trading halt. What do I know? Only that OTTO rhymes with LOTTO!
Fingers crossed this is a sale or farmout of SC55. However, the words Major Transaction may mean it is something completely left field. I hope they aren't selling the golden goose, galoc.
Well will know soon.
Well, that was a major transaction. They have sold the golden goose, but we get some of the gold, Prior to the ann. I would not have favoured selling Galoc, but the way they've done it, makes it sound pretty good. I would call it a bold move as in they are going for it. Like I tell myself, OTTO rhymes with LOTTO. Interesting times ahead.
Hey zigzag
Bold move to say the least....SP reaction very muted. IMHO, should have sold a % and kept a %. Now they have no cashflow. 2 years and then they will need cash.
I voted with the sale of most of my shares. Retained some as we should see who the partner is for SC55 in the coming weeks.
Good luck to holders.
gaz
Hey zigzag
Bold move to say the least....SP reaction very muted. IMHO, should have sold a % and kept a %. Now they have no cashflow. 2 years and then they will need cash.
I voted with the sale of most of my shares. Retained some as we should see who the partner is for SC55 in the coming weeks.
Good luck to holders.
gaz
Gaz. Definitely a bold move but the more I think about it the more I like it.
Galoc is a very mature asset and without additional drilling and discovery it is in its twilight years. Recent presentation have stated production out to 2020, but the rate will be a steep decline from here and the NPV of the 2017+ cash flows would be small especially taking into account decommission etc.
There was also comments around more infil drilling which have cost and risk associated.
Our CFO is a numbers guy and I expect they have spent a lot of time valuing the cash flows and risks to come to this decision.
Also the market wasn't valuing galoc fully. Now we have a negative EV with EARs and sc55 - I especially like the positive talk about 2 potential partners.
Apologies for the fragmented message. Punching thoughts via my phone on a bus in Europe.
The other thing is that any drilling success at galoc is only going to add incremental value. Not multiples which I am after.