Ann: Jacka Executes Farmout of Odewayne Block , page-15

Ok guys, excuse the informality of the below ramblings

AGM was very informative, I am much happy now . ill try to cover everything,

AJE
The new CEO just got back from London with JV talks, says the project momentum should move very quickly, (even though there is some deadline creep) once the FDP is approved by government, they can book reserves (so a possible funding option if they need it)
The question was asked if they would sell it, the response was suggestive IMO of 90% no, but If they have to they will.
There is a new partner in the JV Newage energy who is working on barge style LNG and they want this to be a part of the phase 3 development (which I assume means higher prices for the gas and no need to constrain production)

Somaliland
They are extremely excited about this, I get the impression this will be the main value driver.
Unfortunately it looks like the well has been bumped till very late 2014/early 2015 to hard to say now though everything changes.
The deal today isn’t too bad, I asked about the option to reacquire the 5% and it was explained that all they need to do is commit to the next phase of exploration after the first well. And there is no cost to execute this (apart from the forward participation at 20%) . So effectively they have 20% of the odewayne block still. (that makes me happy)

Tunisia

They are under no illusions that this was a very trying well, the impression was that the drill rig chosen was barely capable of performing this drill. They also mentioned that this many complications is very very rare. They mentioned that it was a very trying time for them financially but they HAD to keep going because if they don’t, they would have to forfeit the 15%.
On a brighter note it sounds like they hit something pretty big down there, lots of flow without stimulation which is unheard of in that area. And they mention the market has downplayed the results,
Mentions of pre HW POS was 50% and now ST/2 POS 90%, the next well will take a more direct path to the 2 end fracture zones, where they lost a TON of mud in hw3 st/1.
Dragon will play a much larger role in the next well.

Ruhuhu.
They discussed that upon application and grant of this permit that JKA has access the expertise of Australian company’s already utilizing CSG and that one could eventually be brought it to develop it. (much of what PSI said which makes me think PSI is on the inside…*inside man*) ?

They said they had received heaps of offers to farm in already (almost laughing at how many offers) , but are waiting for the right time to extract the most value from a farm in. I asked if their intentions where to do their own 2d before brokering a deal, but they kind of skirted around the question more so agreeing that yes doing your own 2d definitely gives you the ability to get a better deal. But I think they will do more basin modeling (and maybe gravity survey) on the conventional area and then start discussions.
Sounded like they were in the driver’s seat with Tanzania, and could extract a pretty good deal with this one. (and remember they have 100% of this, could see a cash component too)

WA399
Pretty sure this will be sold / dropped very soon

Cash position if I heard correctly is 4mill in the bank today (not counting the 10mill receivables from Somaliland ) + access to the 5 mill loan
Over all I am much happier about the cash position, sounds like they have plenty of options in the future. The new CEO seemed to fit in well,
I have been to many AGM’s and think I am a pretty good judge of character/intentions, I get the feeling these guys love what they do, and are no way in it just for a pay check.
My only concern is the continual deadline creep, just seems it’s always another 6 months. (I understand these things take time and being a minority JV partner they are at the mercy of others, it’s just a little annoying)