re: Ann: Letter Of Intent Executed for Pathfi...
Hi Shelcomm,
I may need to brush up on my English (Gassed - you may have been right with the 4th grade crack back when).
I'm re-reading the announcement a few times.
The "drill carry" is $6M GROSS per well at AKK 85% WI.
That implies a HZ with a well AFE = $7,060,000 roughly.
Existing 15% WI partner pays $1,059,000 which leaves $6M
But AKK now really only has 55% WI which is $3.3M share
So the drill carry is really a "net" of $6.6M
Of which by my estimate of $10M already invested ($2M acreage + $5.5M Hz +$2.5M vert) means AKK is being reimbursed costs of $3M
So the new money is $3.3M for the approx 3,000 acres - or more like $1,100 an acre (much more like what I had thought)
Now I am not surprised by market reaction - nothing special.
Still - means 2 Hz wells where AKK pays nought. Depending on timelines wonder how long before 4 PDP wells and what the 1P reserves will be.
My comment on gas infrastructure is that this may have taken the heat off AKK to get that done right away - but I agree it would be good for AKK to get a GSA.
Anyone else re-read and agree with my new perspective of the value of the Farmout. I think I was wrong earlier..
GLTA
AKK Price at posting:
1.4¢ Sentiment: None Disclosure: Not Held