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The Erin Energy Liquidation Thread, page-6

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kkw

7,145 Posts.

699

17/07/18

22:20

Post #: 34406457
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Originally posted by rollacoaster ↑

Will be interesting to see how this plays out, it has been asserted FAR are entitled to the 20% by either a lein or other function of the commercial dealings with Erin.

What price and when will be the interesting outcomes if it happens, if it is a lein then theoretically the Liquidators can put the 20% on market and take the highest price (similar to a bank mortgage) which FAR may or may not be able to PE but note that the price will be 'at market'. If FAR is entitled under some other function then what price does FAR have to pay? Just wipe the outstanding debt or how is the value calculated?

I cannot see how FAR can just nominate a value, call it a day and walk away with the asset? That would be like a bank walking away with your house and not giving you a cent because you missed your final $1,000 repayment even though the house is worth $500k, surely the 20% would have to be put on market to test its value?

A downside risk is that the liquidation takes that long that the Well has already been drilled and is successful (good problem to have!), then the liquidators sell on market to the highest bidder at a substantially higher price. This risk is for those drooling (rightly so) over the extra 20%, if the well is successful the liquidators wont want to let it go cheaply and if it is 'dry' then it is worthless to FAR. The safest option for FAR is to get hold of the 20% if it can before the well is drilled, this needs to happen ASAP as the drill is not far way.

The other downside risk is that this has the potential to delay the drill or derail the Petronas farmout. I doubt either of these will occur but you cannot rule it out until the Petronas deal is approved (overdue now? Update in the coming qrtly?) or until the well is drilled.

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Rolla,

This very point was discussed at the Syd Presso. They cannot sell it because there is a debt owing to FAR. CN said they have already been advised of FAR's right to the asset. There is also $5 mil owing to the TAX dept, in fact I think CN even made the comment that if we have to pay that bill, it'll be a cheap buy. So my guess, it's ours!

KKW

FAR Price at posting: 11.0¢ Sentiment: Hold Disclosure: Held
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The Erin Energy Liquidation Thread, page-6

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The Erin Energy Liquidation Thread, page-6

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