Ann: Buffalo Farmout and Redevelopment, page-254

I recall someone here noting AC talking about capital allocation being a critical issue (at the AGM?). Thinking about this methinks he was alluding to Dorado, Apus and Pavo being the main game with Buffalo maybe being potentially good but not comparatively worthy of spending buckets of scarce capital. Before Dorado Buffalo was the main game. So, for me, the ADV farm out achieves the objective of keeping the project moving along without allocating huge capital to until commercial oil is discovered. Not the greatest outcome but one that AC likely to be happy with given capital allocation issues.

And after initial scepticism I'm growing more comfortable with ADV. Yes it's had a chequered history but backers bought the shell company as a convenient vehicle to achieve their aims (picking over areas abandoned by majors) and Buffalo meets these in spades. Its principals seem to have good experience in the oil industry so that's a big plus. They seem like sharp operators so AC will need to be on his best game and I think so far he is.

The market was less than excited by the JV and that's good from a SP perspective. If it falls over the SP may not be overly affected (you would think). So the captain et al seem to be focused on the main prize - Dorado etc and happy to punt a bit on Buffalo without burning too much valuable cash.

I know others here will have different opinions but the above is just mine.