Yes, that's why I've used a 10% discounted valuation. Even if you don't agree with the discount, remember this is only talking about the 2 wells we're currently about to drill.
If we found oil in either of those wells, the whole of the blocks (a massive 7000 square kilometres, and we've got another block VIII that we'll develop in the next couple of years too) are derisked as far as oil exploration is concerned, so any buyout would have to take into account that potential too.
We own a hell of a large area, with a proven hydrocarbon system, with great infrastructure nearby and good size targets. In addition to them we've got 20% of blocks that could hold comparable amounts of oil to the Yemen blocks.
These opportunities simply don't come along every day. RRS's licence areas are huge, and the cost of the wells is cheap to drill in Georgia, we're free carried for the drilling in Trinidad, and free carried for the second Puntland well. Our only expenditure will be approximately $7m for Georgia, and $5m for Puntland (if it goes ahead), and we've got the 2 Herrera wells to be drilled this year.
That's 6 potential company making drills for $12m. There's no need for a capital raising, we're already fully funded for the whole of this year.
Sure if no oil is found then it'll go down as fast as it rose- but that's the same in all exploration companies.
Add to My Watchlist
What is My Watchlist?