The Placement at a significant premium in this market must indicate an internal value proposition that is not obvious to the rest of us. Why would CNOOC bother if they didn't see positives in the Shale Oil work to date.
The additional Farmin for EXE's carry means another $25.4m spent in the ground before EXE has to contribute. The last presentation in July said there was still $24m to be spent by CNOOC of the original Farmin.
So, after this deal closes EXE will have a 40% interest in 46000km2 on which its JV partner still has to spend $49.4m and the Company will have cash of about $26m.
EXE will be in a very comfortable position to capitalise on new positive drilling results and maybe any diversification opportunities that arise.
EXE Price at posting:
10.5¢ Sentiment: None Disclosure: Held
