The margins when trucking should be under $40 AUD based off the prices reported in the EPT. I don't think the price drop in Brent is causing the price drop in BRU.
I also think this recent deal was a good one for Buru. Its better to get some activity on these licenses than no activity. We retain a large slice of the pie and hopefully Apache will move forward with their option to further drill Acacia.
The deal would have to be worth a minimum of 60 million if they do take the option over the acacia permits to fund 80% of the first two exploration wells and also the two appraisal wells if successful.
If they don't move forward with their option over the Acacia permits then we just got 30 odd million spent on the coastal permits. Nothing to complain about that. We were never going to target these licenses anyway. The whole purpose of this agreement sounds to me like the following.
Buru - "Okay spend 25 million on our coastal permits and then we will give you the option to move forward and drill our Acacia permits"
Not sure why they have been punished. Maybe the shorters just dont give a rats ***. They will just smash her down no matter what and continue to hit stops and manipulate the price. The drill bit touching the ground will be the one to get things moving in the right direction. Possibly 20 million barrels recoverable at Ungani? That would be nice. Lets hope management have a few surprises around the corner.
BRU Price at posting:
$1.53 Sentiment: LT Buy Disclosure: Held
