From these announcements you can see that the farm in by COP is to be completed over 4 phases. Currently we are in Phase 1 which was amended early last year to increase COP's funding cap to $13 million per well for this phase, probably after they conceded how difficult the project would be in this vast and remote area.
Now my read of the Goldwyer Update above indicates that for these 3 exploration wells in Phase 1, COP will fund the first $13 million, and all costs incurred beyond this amount would be borne by NSE. Now usually, when the terms of a farm-in have been satisfied, costs will be split down the line between the JV partners. I don't know what the situation is here, but I suspect Phases 2-4 will be along the lines of appraisal of any discovered hydrocarbons, and I would expect that any appraisal activities up to an agreed limit would be funded by COP (now split with PC presumably), with a reversion to working interest funding thereafter.
So, my question for NSE would be: Have they exhausted the COP funding for the first two wells ($26 million), and how much has NSE spent so far on these 2 wells, and how much do they anticipate to spend on completion of the Gibb-Maitland well. If we can get the answer to these questions we will have a pretty good idea of how well funded NSE are at the moment and for future activities. Really shouldn't have to ask these questions IMHO.
I hope this helps
Cheers
NSE Price at posting:
20.5¢ Sentiment: None Disclosure: Not Held
