I think we could avoid a CR by breaking down that capex further. Using your numbers the JV would need $9m to drill Odin-2 and upgrade the Odin- Vali connection. So Mel would need $2.25 + $1.5m, call it $4m.
MEL was able to negotiate a $5m facility in March prior to any Odin revenue. MEL is a more attractive finance option now with regular Odin revenue and should be able to access $4m finance for Odin-2 and upgraded connection. Potentially even a stepped facility where success at Odin-2 could then underwrite another $2m to drill Odin-3.
Then we have the unknown "commercial terms that encourage field appraisal and production expansion" with Pelican Point. Given Odin-1 is a success what/how can PP assist the JV to continue to develop the field?
I don't think VEN have the capacity currently to commit to Odin-2, Odin-3 and a connection upgrade and they will be the ones to set the pace of development.
MEL Price at posting:
0.9¢ Sentiment: Hold Disclosure: Held
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