Ann: 88E AND XCD TO MERGE VIA RECOMMENDED TAKEOVER OFFER, page-62

88,

Thanks for the link and the listen.

Yip, Dave definitely pushing the "we knew the oil was up dip but Premier didn't listen to us and chose the Charlie location and lab results will prove us right. They were paying so is their fault. Stay tuned for my story though because these lab results will confirm what we knew"(that's me paraphrasing).

Interesting he is attributing the delay in results to Covid-19, so when he announced on the 20/4/20

"The first of these results will be known in 2-3 weeks, with final reports expected 3-4 weeks later".

He made no allowance for any delay despite being in the midst of a Covid-19 pandemic?

The rest of the podcast is mostly Dave dangling a carrot,

We had looked at these leases and they were stranded, now they look much better.

XCD leases remind me of Icewine.

Icewine had some heavy hitters ready to move then the oil price dropped and we snapped them up when they fell away.

We love risk, at the right price, if the reward is massive.

We don't need an oil price to be higher in the next 2, 3, 4 or 5 months but it'll be easier to secure a Farm-out if it is.

(Again the above is me paraphrasing)

Good point Dave, to secure a Farm-out requires a higher oil price for a Farminee to take on the risk that you're happy to pick up for cheap. So next to no chance of seeing a Farm-out this year then?


Couple of articles this week in the Petroleum News, care of Kay Cashman (great name).

The 88e XCD merger,

https://www.petroleumnews.com/pnads/135573981.shtml

Also, Oil Search have laid off a bunch of staff. But of interest is the last paragraph.

https://www.petroleumnews.com/pnads/406113255.shtml

When asked, “what price point do you see being able to advance your fall drilling” by a committee member who was referring to a winter exploration program, which Oil Search canceled for next year, he replied: “We’re hoping to lower the breakeven cost of the project. Currently our project has a mid-$40 level economic return and … a few months ago it was $53. To answer your question, back up to the high $40s, $50 would give us the confidence to advance the project.

With the current ANS oil price at ~$26.40 to advance any project in the near/medium term significant head winds will be faced.

Hope all are safe and well.

Just my Friday thoughts

Cheers and beers