ezyc..
I too, have been a bit surprised how the recent Ann.'s have been Presos on TS, with no further mention of the Artemis Farmout.
In a way I can understand why no more about Artemis, in that "commercial confidence" agreements etc. would be in place to protect both sides in the Farmout process.
It just made me wonder about the timing of the whole deal.
The new "Farmer- deep pockets" in Artemis would obviously have the all the say as to when they would proceed to drilling - there would be no reason to rush into this, which could leave MEO with an asset which would not be producing to provide cash for TS.
IMO, you have hit the nail on the head, with the idea that the Farmout incorporate a % of TS as a "sweetner" to ensure that an early start could be guaranteed on TS.
As I understand it, TS has found gas in place, whereas Artemis is yet to be proven.
Artemis would then become "secondary" to TS - a way of reducing risk to both MEO and Farminee - by concentrating on proven gas in TS and not depending on a successful well needed to finance the proposed TS Hub.
This "sweetner" in TS could be covered in the "other factors to be negotiated" clause in the Farmout brochure. This % in TS would have to be significant (30% + ?) & could be traded off against the % given up in Artemis.
Therefore, it would make good business sense to focus on TS up front, develop the LNG part of the proposed "Hub", and follow up on Artemis as cashflow increases. The LNG Hub facility would need to be sized to ALSO handle any future proven gas from Artemis (via a new pipeline to TS?).
The remainder of the proposed TS Gas/CO2/Methanol part of the Hub could be developed later when the technology, cost benefit analysis and future markets for the methanol, were better defined.
Seems to me that this would be a win/win situation all round:
New Farminee has more incentive & confidence to rapidly proceed.
MEO and Shareholders VERY happy - would give earlier cashflow and sp support.
Mr (use it or lose it) Ferguson & the Govt (specially ATO) would be happy.
If there is a simple farmout of Artemis IMO the sp will stall unless the drilling can be guaranteed to be fast tracked as part of the deal - this would obviously depend on who the Farminee will be - it may or may not be in their interests to fast track the Arttemis prospect, as procuring it may be only a way of "tying up" the asset to prevent any opposition companies from obtaining any advantage.
I am sure posters will have a view on this and I will stand corrected on the logic, if necessary.
All comments and additional ideas are welcomed.
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