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Questions on Seismic RNS
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Answer
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dazzle1000 1: are the 5 targets all overlapping each other to minimise cost of drill. And is this going to repeated on the other 15 traps/fans that may hold larger oip?2: if above how long would farmout/in to bring in a major?.
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The map shows where the targets overlap for the Top 5 Leads identified. Golf/India and India/Juliet. We are only 50% through so there could be more stacked targets.
There is no standard for the time it takes to farm something out. We are planning at this stage to go it alone for Icewine#2 and then assess post that result. We always have feelers out assessing any opportunities that may be accretive for shareholders and will continue to do so.
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Noticed that Alpha extends outside the coverage of the recent 2D/3D – how did you map it in that area to the east?
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The Alpha lead boundary is outside the recent 2D area to the east but we have legacy 2D data in that eastern part and now that we can easily see this feature (on the new 2D) we know what to look for / fine tune on the old data - where it is now also evident.
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Jason Hare: How will the new conventional find change what was originally planned? And could it mean going into production to fund the rest of the project?
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We have not found anything yet. We have identified features that could hold oil. The original plan was to assess both conventional and unconventional. The timeline to production on the unconventional is potentially faster than the conventional – depends on Icewine#2. Oil project typically have payback periods that are 2yrs+ - so production would not be able to completely fund any development at 100% from Day 1.
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Aussie155: Is it likely that the company will commission an IRR to confirm the prospective resource once our seismic interpretation is completed?
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Under assessment.
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Kent Bedford: Would buying the 3D seismic data of the Alpha prospect from that other company that shot the 3D over most of our acreage help get us to a farm out quicker?
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Under assessment.
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Jason Hare: With the discovery of the conventional play does that mean investors are at least guaranteed to make their money back?
Tim’s notes for discussion: This is an interesting one which could support the share price. Clearly nothing has been discovered but can we say the down side risk has been mitigated to any degree? With a 50% risk on unconventional can we now say that with a conventional prospect overall the project risk has reduced? If so can we put a figure on it?
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We have not discovered a conventional play – the play was always there and we targeted our seismic to determine whether there were large traps in existence on our acreage. What we have seen so far indicates that there are. No guarantee that they are full of oil or the reservoir is producible – same as all other oil and gas exploration.
Since I don’t know what price investors paid nor the results from the upcoming drilling by us or the guys to the North of us, I cannot make any judgement on guarantees of getting money back.
Have the seismic results increased the value potential at the project? YES
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Questions on US Institutional Funding
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Timelybuy: Could the contract that has been agreed upon have clause that would prevent 88e from selling up before the 2 year period? That would mean that the options would never be issued? I also see a 5 year mention there too.. I was under the impression 88e might not be around for that long if all goes well.
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NO. The options can be redeemed by the Company after two years if we want the holder to pay the exercise price because we want the money that would generate. If the company were to be taken out then the option holders would convert their options to shares and sell them alongside everyone else.
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The US Institutional investment is ASX based in A$. Does the weak £ make it attractive to buy into London markets? What are your thoughts on wider public US trading? Would you see this as a possibility in the future?
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The placement was done in USD based on FX on the day of closing. All of our expenditure is in USD so that is really our functional currency and where we hold most of our cash – FX movements then have no impact. US listing is possible upon success at Icewine#2
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Aussie155: Would the options... much like Option Holders in Australia will be included in a buyout deal.
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If they convert their options to stock. Which they would. Takeovers are not instantaneous – offer is made and stock continues to trade – sometimes at a premium if there is a view that someone will bid over the top or at a discount if people believe the conditions related to the takeover may not be met. During this period – usually a couple months – conversion of options / trading continues as normal (albeit the share price would be higher!!)
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(20min delay)