re: Ann: Service Contract 58 - Election to Dr...
I'm trying guess the thinking of the players...
From Nido's perspective... Simple This is good but expensive ground Lets hang on to it, if we can, for as long as we can, in the hope of landing a farm-in.
From the majors perspective... very simple Do we risk upsetting China? Is the cost worth it for perhaps a 40% stake? If we don't farm-in now, what is the chance of PNOC losing it and being able to secure 100% on open tender? Let it go and see what happens...
From DOEs perspective... moderately simple Nido haven't been able to bag a farm-in South China sea issues are being stated as concern for the majors If there is no interest from the majors - maybe PNOC/Nido is the one best chance of something happening PNOC are the local crew - let it run on...
From PNOCs perspective... Tricky we don't have to chip in a cent under the farm-in with Nido but there is some risk of losing it if Nido can't pull it off. Drill or drop is approaching but no one has a better relationship with DOE than us and we'll probably get an extension. Is there any advantage to letting the Nido interest lapse and deal direct with potential farminees? Probably not. Is there any prospect of Nido funding it by themselves? Probably not. We're getting nervous about drill or drop...If Nido could be getting close to a deal, then lets put the pressure on. Give them a little more time, but just a little. If Nido can't close a deal, what do we do then....???? We don't want to lose it but we don't want to be drilling it by ourselves. No one seems to be interested except Nido, but they can't do it themselves. What to do? What to do????
A six month extension brings a sense of urgency. Maybe Nido are getting closer to deal and being given the message to just get on with it - do a deal, any deal to make this happen. If Nido can’t do a deal what is PNOC’s plan B? Could we see a renegotiated farm-in perhaps?
NDO Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
