Ann: Quarterly Activities and Cashflow Report, page-17

Jems - I covered the time point on 12 July 17 -Post#

25861467​

Relevantly: ​

On the arbitration - a word of caution - this type of process (and I have no insight whatsoever into the specific FAR/COP/WPL process) tends to be very long, complicated and expensive. The first issue is to appoint the arbitrators - generally 3, often it is one nominated by the claimant, one nominated by the defendant and a "mutually agreeable" arbitrator. This concept of "mutually agreeable" is strange in the sense that you have two parties in the middle of a dispute trying to agree on who will judge them (cf a Court where you roll up and are allocated a Judge). So if you are a defendant you can delay for a (long) time by not agreeing to any arbitrators or putting up your "mother".​

The next issue is where to hold the arbitration. You need agreement from all the arbitrators, the protagonists and their lawyers as where to hold the arbitration. Amazing the only place they can agree is the Bahamas in the Northern Hemisphere winter or Hong Kong around sevens time. This might mean the delay is months to years (and not weeks). Then the cost of flying the arbitrators, lawyers etc to such a location is expensive........ And often for weeks at a time. Call it USD 10m (plus). And their is nothing the claimant can do because if they say no to the Bahamas then they have to find a new group of arbitrators....... And the arbitrators know this all too well....​

Notwithstanding the above, my feel is that FAR have a reasonable case as it does seem that COP has attempted to frustrate the pre-emption clause by either (i) selling the company; and/or (ii) not providing FAR with the requisite information to enable FAR to exercise its pre-emptive rights.​

Further, regardless of whether the arbitration costs: USD1m, USD10m or USD20m and assuming a 50% chance of winning, it is my view that it is money well spent. A drill hole (even into something like Belletrix) has a relatively high chance of failure. A successful arbitration and subsequent pre-emption has 100% chance of "finding oil" - it is already there and has been largely proved. The real issue is whether or not the cost of the arbitration and the pre-emption consideration are less than the value of the oil in the ground. My view is that the value of the oil in the ground will be more than the cost = good investment.​

I hope the FAR arbitration starts and concludes much more quickly (and for less money) than I have outlined. But as I said before time will reveal all.....​