Thanks for the info Agent. It's definitely a different strategy to what I had assumed.
I just assumed that SEA would be looking at leasing expired acreage directly from landowners (i.e. companies like Chesapeake grabbed as many leases as they could back in 2010/2011 on 3 year deals, and due to financial reasons have not been able to HBP all of the acres, leaving some leases to expire and essentially be 'available' to the market once again).
So you're confident that instead of trying for expired acreage, SEA would likely be contacting other O&G production companies in the region which do not have financial capability for all of their EFS acres? (which still would have 1 or 2 years left on the lease terms).
i.e. rather than that O&G company letting them depreciate to $0 on expiration, they'd rather sell at a low-ball price (i.e. maybe 5,000 acres for $15 million)?
Your idea certainly makes more sense, as leasing from expired acreage could be incredibly hard to get contiguous blocks.
SEA Price at posting:
$1.07 Sentiment: LT Buy Disclosure: Held
