What I believe this announcement means:
1. PCL/ORG did not jointly market the lease.
2. PCL will look to retain 25% interest.
3. Imminent capital raising to secure finance
4. PCL will follow in the footsteps of many LSE listed juniors by going for a $30-40 million cap raising.
5. We get a 25% interest in 1 billion boe prospect offshore Kenya. If PCL hit oil we become the next Kosmos and on we go to valuations upwards of US$5+ billion.
Share price is falling , given PCL have still not outlined exactly what they plan to go with their 25%. Right now everything is pointing to retaining 25% (imo). 800m water depth and 2500m below sea bed to hit cretaceous should cost $40-$50 million for the well. PCL will need about $15 million for the initial target and possibly more if they make a decision to evaluate the Jurassic and drill to some 4500 - 5000m.
FAR drilling Kora in 2600m water depth to cretaceous targets at about 2000-3000m and estimated well cost is $32 million.
On the other hand one can assume Apache will be paying 1.5:1 for its equity interest. 50% interest is a large slice for a mere $13.2 million, so they must also be covering ORGs 25% interest, though how much of the 25% will be covered by them is not disclosed.
If PCL strike a similar deal, based on the current Apache/ORG deal, they can potentially farm-out 10% equity interest with the other party paying 1.5:1 and hold onto 15%. The third party will free-carry PCL through 5% of its well cost. Thus, you will not need to dilute share capital to such an extent (as holding 25%).
Share price will fall as the cloud now hangs over PCL and not the project itself. Project is de-risked by Apache farm-in. PCL need to get their act together and start talking. Could go on for days about "what they could do", but it makes no difference until they say something.
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