Cuba Block 9 Valuation, page-19

Would be useful if RZ did a talk-show on this to help flesh out the strategy and thinking.

My take is this is akin to a Royalty Interest (MAY retain base ownership rights) as opposed to an Overriding Royalty (ORR) - see below links which helped me to understand nature of the deal - but difference simply moot.  At end of PSC the rights (& costs) will revert to MAY for the remainder of the Block 9 term.

Profit Oil is after Cost Oil is accounted for - to repay exploration, development & production costs.  Profit Oil is accrued probably from Day 1 but would be based on a formula set out in the PSC (Production Sharing Contract).

12.5% of the profit is probably a reasonable deal where not contributing to costs (at all) and therefore not having to raise development & production funding thus avoiding significant SP dilution.  A sit back let them get on with it and bring forward other things?

What's the deal worth?  Probably heaps but first needs to get signed and then based on activity & news flow - depends on the oil found/flow.  Hope RZ soon comments to give greater insight.

Links:
https://mercercapital.com/energyvaluationinsights/how-to-value-overriding-royalty-interests/
http://www.oilinuganda.org/glossary/c/cost-oil.html