sc 54 farmout, page-7

Time will decide your pessimism smallfish. I am more optimistic. Personally I am just taking a longer view than hoped.
IMO a Major will hope for better leverage in this market but there should be no discount given due to market sentiment on the JV front at this stage . We needed IMC cash to fund current activity but with Wilbos demobilising it appears no more need for funds until next year. My counter would be come back when sentiment changes and revisit the fundamentals. The majors have been recording record profits selling into high oil so now is the time for them to pay up and grow there reserves. NDO have good cash reserves Yakal/Tindalo should come in under budget the way progress has been made so KIK have cash to see through to 09. I would sooner see some time extension on JV than give uneccassary equity away. Too much work done here to have an extensive matured drill ready portfolio with multi billion barrell potential and not optimise the opportunity. KIK/NDO need to show a strong stance here, this may be some of the best asset on market at the moment. IMC have an option on deeps at up to 20% after Jan 1 09 so I assume KIK can deal as they choose with there 40% until that date (guess) and are shooting to retain 20% equity.
PAY UP MAJOR AS FUNDAMENTALS SHOULD RULE THIS DISCUSSION.
We have drill ready targets with quality 3D from Veritas identifying the sweet spot and here is the deal.
1:Major 50% NDO 30% KIK 20%
2:Proportionate share of sunk costs.
3:Free carry with drill cost refunded on discovery only.
Sign here and see you at Gindara.
This market is volatile and can turn a profit into a heretick in a day so this is just my opinion.