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I agree about MU doing a good job.Perhaps we should sell GC21...

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ronstieb

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21/01/21

12:13

Post #: 50337484
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Originally posted by gdn001: ↑

Ron,

Risk is fairly high at the moment.
Hopefully it turns out OK.

Firstly, I would say that the new management (Utsler) is orders of magnitude better than past management (MA and Jeter).
Unfortunately, he has to deal with the unfortunate GC 21 outcome.
This assessment is based on the terms of the Talitha sale and the renegotiation of the MB terms/conditions.
Both could have been much worse IMO.

If GC can be sorted (by 31/7?) then OEL should be fine (no need to raise capital).
It is not clear to me if a solution needs to be (successfully) implemented by 31/7.
I suspect (hope) that it is that a (possible) solution is identified, and the (approximate) timing of the work is known/agreed.

If GC can't be sorted in the timeframe announced, then a lot more will be riding on the Talitha result.
I suspect that the timing of GC conditions (31/7) and Talitha escrow (30/6 - which is very short) is not coincidental.

If GC can't be sorted, then I suspect plan to save the company's bacon, may be to sell all or part of OEL's PANR stake to appease MacQuarie.
If Talitha is successful, then PANR could double or triple in value.
Selling the PANR stake would clear a large chunk of their debt.
If Talitha is a duster, then the PANR share price would tank, and sales proceeds would only clear a small portion of the MB facility.

Talitha will most likely find oil. It is a higher up the structure from an earlier discovery.
The main risk for Talitha is that the oil can't be commercially extracted (result of the discovery well).
In summary, good news (there is oil) comes first, and bad news (can't get it out) follows after additional work.
This scenario could save OEL's bacon.
PANR share price reflects "there is oil here"
OEL sells (some/all) PANR (essential if GC can't be sorted).
PANR share price tanks "can't get it out"

I suspect that something like the above is Utsler's plan to manage OEL's risks/predicament.
I believe that MU has done an excellent job given the horrible hand that he has been dealt by the incompetence of previous management.

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I agree about MU doing a good job.

Perhaps we should sell GC21 too, in exchange for Talos shares.

If the MP sand is a dud, that leaves 70% of 1P reserves in the DTR-10 sand,.
1P oil reserves for GC21 stood at 744mbbls net to Otto.
70% in the DTR-10 sand would be 520mbbls net to Otto.
Probably worth around USD10m (USD20/brl) at the moment, given the rate at which the DTR-10 will flow is yet to be proven.

Alternatively, we spend another USD5-10m in remedial/recompletion work and pray that it works.

OEL Price at posting: 1.2¢ Sentiment: Hold Disclosure: Held
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I agree about MU doing a good job.Perhaps we should sell GC21...

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I agree about MU doing a good job.Perhaps we should sell GC21...

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