I don't think its a discussion around market cap or current CAPEX, based on the current split you're only talking ~$300mmUSD in expenditure for a hypothetical 3 exploration/appraisal wells. WDS could find that if they wanted it. The issue is as OldGeo has put in various posts that there is sufficient geological uncertainty that it doesn't fit WDS's risk profile. If you look at their announcements they target a IRR for oil of 15%.
Risk weighted hitting the biggest target you're at 56mmbbl for one well at ~$100mmUSD. If you take a simplistic view of the world Sintana has a market cap of $168mmUSD. Assume all of that is attributable to their interest in PEL83 that implies an IGV for Mopane of $3.3b USD. If you take the 10b pre-drill figure as the OOIP and compare that to the "Best Estimate" OOIP for all of saturn that implies a value of $0.34c/bbl OOIP IGV.
Hyrax/Oryx Best Estimate is 1.78b BBL OOIP means an implied value of $600mmUSD. GCoS discount that to $120mmUSD risked then only 56% of that is attributable to WDS so ~$67.3mmUSD and you have a negative IRR for drilling the well.
If you could improve the GCoS, IGV or a combination thereof you could probably make the numbers work but right now its a tough sell.
PCL Price at posting:
0.9¢ Sentiment: Sell Disclosure: Not Held
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