Tullow farm down in Uganda and Rights issue, page-4

Thanks for the post Hereandnow. It certainly does increase positive speculation that Tullow will drill, however, at this time, it still remains an "if and when" scenario. I would imagine for the soon to be added USD $1.65B that higher priorities for Tullow would be further appraisal around Jubilee and TEN fields first then followed by Kenya.

Perhaps?? Namibia will get a look in after this work has been costed and approved internally.

In PCL's Quarterly Activities Report for September 2016, released on October 31, 2016, it states the following:-

“The farmout agreement under which Pancontinental is fully carried for this exploration period states that a well is to be drilled by March 2017, one year earlier than that required under the terms of the Petroleum Agreement signed in 2011.”


Immediate questions that come to mind are:-

1. What is PCL going to say to Tullow at the end of March? Will PCL say that you have not complied with the farmout agreement and are now in default or will they say (if Tullow do agree to commit), that we agree to an extended timeline but drilling must commence on a certain date well before expiry?
2. If PCL do push the default button after Tullow agree to commit, will they try and renegotiate any part of the farmout agreement? Perhaps a good starting point would be to get back the +USD$500K Tullow hit PCL for as part of management fees?
3. What is AEC going to do? This farmin agreement was dated Nov 30, 2016.The agreement was subject to satisfaction of certain conditions including consent of JV partners and Government of Namibia and including AEC being satisfied with its due diligence enquiries, all of which must be satisfied within 90 days or such longer period as the parties agree. Well, the 90 day period is completed and we have still heard no word from PCL!! I would have thought that was material as an upfront payment of US$1.7M from AEC is still waiting in the wings. Perhaps AEC are continuing to find "every excuse under the sun" to not finally conclude due diligence period UNTIL we all hear from Tullow??

The next 10 days will be interesting! The points that I have raised above are simply "what ifs" with possible scenarios. I am sure there are other scenarios that I have not addressed and would welcome further comment from other posters. I am still positive that Tullow will commit but also bracing for what next if they don't.