underwriting facility, page-63

xanadu242...

Energy Africa are currently in negotiations for additional concessions in the Cameroon, in acquiring Turnberry resources and their 40% of the North Matanda concession, CVI also get to acquire what ever else Energy Africa may get.

North Matanda was/is in effect a very big foot in the door for CVI.

I have always been a little perplexed at Smyth's numerous references to Cameroon as a stepping stone into the region, especially in light of the significant endowment North Matanda provides.

So...with consideration of previous references to North Matanda being a stepping stone, the fact Turnberry (via Energy Africa) are currently negotiating other ground...and perhaps against a backdrop of "difficulties" in arranging a JV with either/or Grynberg and Bowleven, it could well be a view that relinquishing North Matanda in preference of a larger stake in an on-shore concession "nearby" (Bakassi Peninsular), is seen as a more attractive step at this stage of the process.

My assumption here is they would only on-sell North Matanda, or even (thinking laterally), relinquish half of their 40% for twice what they paid, thereby leaving them with 20% of free exposure...only if they were to get something better.

Needs to be better than 24mmmbls (net to CVI), so if such a deal were announced, I imagine it must be a pretty good swap for CVI.

I imagine development costs for say a Bakassi on-shore development would actually be less than that for the North Matanda field...I also assume we may end up with a greater percentage cut, in what would essentially provide far more upside in terms of field size, flow rates and indeed, sunk costs.

I believe there are also existing wells, which were in production prior to hostilities...so any such "swap" may also result in near term production, simply for the cost of re-establishing surface infrastructure...not unlike the Kwanza actually.

All speculation of course...but this is after all a speculative stock.

As for the $100m finance facility...this is a requirement to qualify for awarding of the "designated Confessional onshore acreage in the Kwanza Basin. Such a commitment avoids land being locked up by tyre kickers, suggesting the Angolans are serious about seeing their ground worked rather than just looked at.

The key word here is "designated"...which I think some have missed. I refer also to CVI's previous announcement confirming the awarding of2 concessions in the middle of the Kwanza basin...another little tit-bit I feel the market has entirely forgotten.

This is not a raffle...it appears to me they have this ground, and all the corporate moves in the interim, from the evacuation of Midwestern from the register, the various placements to numerous groups, the expert team Smyth has gathered, the advisory board, the North Matanda "stepping stone", the delay to the metals drilling programme and finally the pivotal Fortitude deal, which to me looks like the vehicle of choice for the Angolan exposure (which ultimate has allowed Smyth to tie everyone in together under the same umbrella - effectively under the CVI banner)...is all leading inexorably to one very obvious conclusion…

The Angolans will ultimately become CVI shareholders...and together we will share in a significant Angolan energy/minerals entity.

The question therefore might be what assets would the Angolan’s likely award themselves (via CVI)…and why are they so concerned about CVI’s capacity to fund the Kwanza alone to the tune of $100m.

Remember, CVI was asked to provide this on behalf of the consortium…not the others…one might suggest a fairly large impost if it were simply one of many hopefuls at the table.

Cheers!