Some people need to read the Shell SC54B farmin agreement more carefully to see where the real deal lies.
Under the terms for the Gindara exp well, NDO saves around US$8.4M, and KIK US$5M...yep, no big deal for NDO or KIK, but good for Shell.
Now, the way I read it, heres the real deal savings over time. For all future operations in SC54B (after the G exp well), NDO only has to pay 27% of costs for a 33% return (6% free carry), KIK 18% for a 22% return (4% free carry).
In other words, Shell pay 55% of all future costs in SC54B for a 45% return.
If Gindara contains the pre-drill estimates, can you imagine how much this deal will be worth to NDO and KIK just on production development for Gindara, let alone any subsequent targets and development.
Someone please correct me if I'm reading it wrong!
NDO Price at posting:
16.0¢ Sentiment: LT Buy Disclosure: Held
