Ann: Letter Of Intent Executed for Pathfinder Far, page-17

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