The costs COULD be anything but certainly by todays standards and what I have seen recently - rarely do contracts come in under budget - look at NEN, even NZo atm all experiencing cost blow outs.
Yes it would certainly be a sneaky way of getting more %% - playing with the big boys means you need to know where you stand and have the right firepower in place to withstand any nonsense.
BUT it also highlights how most on hotcopper reckon $10-20mill in the bank is good - NO NO NO - not in the O&G game and especially in deep offshore drilling - pocket money.
So the notice of potential costs could have a variety of undercurrents at play - or could just be a plain old fact of life - as you say who knows - BUT the Cos doing this should know the approx. cost - that is there job.
Given TPTs position and depending on the response to their CR efforts - it may mean that TPT reduce their % equity to say 15% which is still a good equity in return for TOTAL coverage of costs!!
IF successful I am sure 15% equity will be big enough AND hefty enough to try and raise capital to contribute to future drilling/appraisals.
NOT entirely happy with my own suggestion here BUT it would protect TPT from a black hole scenario where they loose it all - ie drill down - get stuck - side track - hit some hydrocarbons - lose circulation - 10 days later get it back - keep attempting etc etc etc - ONE nevers knows what will happen and good risk management is required not to lose it all.
TPT have stuffing around with crap T/Os and not been focussing on the main game and now it has come up to bite them - welcome to the EXPENSIVE business of deepwater offshore drilling - and it probably reverts back to the original deal which did not protect TPT from such an eventuality!!
TPT Price at posting:
21.0¢ Sentiment: Hold Disclosure: Held
