Just back online sp haven't yet had time to fully digest this announcement and impact and then look holistically at whats happened with both plays - be a good Qtrly to review.
I may not be reading this announcement in quite the same exhuberant fashion as everyone else - imagine that - its good though. Here goes:
Effectively "sold" 70% of 4,355 acres - so 3,048 acres. Cost to acquire the 5,000 acres was circa $3.2M as I understand it - or $640/acre. Cost to buy 3,048 acres is $1,905,720 - hmmmm pretty close to $1.95M don't you think?
Receiving $1.95M cash plus 30% of $24M as AKK's share of WI cost of drilling those 3 wells - so $7.2M
If anyone see this part differently please correct or....
Alternative interpretation is the Farmin partner is paying the acreage fee plus drilling those 3 wells and NOT RECEIVING ANY WI/NRI for those wells - as that's what they have to do to earn the 70% and it only applies to wells 4 and forward.
That would be outstanding - but I don't read it that way as the contradiction for me comes from the AKK retains 100% for 645 acre parcel (probably the initial 3 well program - which became 2 wells that may be HBP now???).
Either way AKK funding constraints reduced in a major way (still has to deal with infrastructure investment) but I would like to know for sure what the WI/NRI is for sure on the initial 3 wells the farmin is drilling.
Wise words on the getting burnt on taking the big bite their SL!
Close as it gets to a buy without buying it yet.
GLTA
AKK Price at posting:
1.8¢ Sentiment: Hold Disclosure: Not Held
