akk takeover target halcon must be looking, page-26

Gassed et al,

What am I missing? Why is the prevalent thinking that the JV is limited to these 3 wells?

Is this the right annc for the farmout?

http://www.asx.com.au/asxpdf/20130730/pdf/42hb2vj4sh37kp.pdf

or has it changed???



By funding 100% of the next 3 wells in the JV, HK earns 70% of the JV (gross) acres of 4,221.

It notes that "The capital, production and profit for all wells drilled after the three aforementioned wells will be shared on a 70%(Halcón)/30% (Austin) basis."


Why does anyone think HK would give up its 70% rights in those acres?


I'd align with SL proposition too - but Floyd would laugh us out of the room. There is such a thing as "Capital Risk" and just because you can say its 50 locations doesn't mean that 50 get drilled.


Best thing that can happen - HK dedicates a rig (or 2) if Birch is the real deal "high graded" acreage to accelerate development drilling. AKK needs to be prepared for that (10 wells is $25M). Net production end 2015 would be 1,500 boepd (factoring in declines and new wells coming online).

Then make the argument - @ 1,500 boepd at $80K per flowing and you have a $120M valuation and acreage that can support further 30 odd wells of development....

what's that about 5cps??