Looking at the presentation, and at recent other presentations / webinars by the Company, it is clear that the primary operations of the Company are in Queensland particularly with the level of sovereign risk in Mongolia and their involvement with Russia.
The way I read it;
1) Nomgon will be proven up with a gas flow and then sold off or farmed out to another Company such as JGH or TMK which will provide us some capital or at the very least eliminate / reduce our own capital expenditure in Mongolia. That should all happen in the next 6-7 months based on gas breakthrough etc.
2) The ATP-2077 (Project Diona) prospective resources may be able to be upgraded based on results from DD2 and our neighbours (Shell and OMA) whose own results can assist the independent resource auditors to determine more prospective gas-in-place. One or more of the 3 blocks in ATP-2077 would be farmed-out to significantly reduce capital expenditure on those and also potentially might get some funds too.
3) The majority of the expenditure for DD-2 is now done, after the CTU cleans up the well in early-October, there isn't any more drilling to be done so we'll have ~$7M in the bank with DD-2 done and with the resources upgraded from prospective to contingent.
I would then imagine that a major such as Shell would farm-in to the Grandis project and assist in funding DD-3 which secures them first rights when bidding to take over the Company as a whole.
EXR Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
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