Ann: Pryme Closes US$100m Non-Recourse Debt Facil, page-9

re: Ann: Pryme Closes US$100m Non-Recourse De... Hi V8,

It did appear that way initially to me also. Couple of thoughts:

1. The LLS/WTI differential likely wont be around in 4 years time - its a logistics problem solvable by pipelines/rail to move crude to the PADDs and refineries that need product.

2. More importantly I think, is take a close look at the projected decline curve and its effect on NPV. It is very steep. These wells may only last 6-10 years but payout in 3-6 months and produce 80% of EUR in 2 yrs. If that pans out, then realistically at 6 wells per annum the top 18 well locations are done in 3 years and PYM has the bulk of the Austin Chalk return, and MacBank NPI is reasonable payment (in the production tail of remaining wells) for farming into the leases

Now what that does for the TMS - and I assume the terms are MacBank participates in all intervals - is that we have a farm-in partner paying and receiving proportionate share of the lease interest.

The TMS wells are expensive presently - so hopefully PYM hold off and knock the ball out of the park on Austin Chalk while others figure out the TMS.