Firstly, OEl doesn't have the cash to drill the big wells all by themselves. Estimated costs of Hawkeye alone is 40m.
Secondly, no oil company would put all of its money into drilling one well. That is a far too risky strategy, that is why oil companies (even the big ones) take percentage stakes in numerous prospects for the purpose of spreading their risk. Just because it is a good prospect doesn't mean it is a guaranteed success.
Thirdly, OEl is trying to gain value from this farmout. Currently, if they were to drill themselves they would have to pay 100% of the bill for 93.18% of SC55, however with the BHP deal they would have 28.18% of SC55 free carried for 2 wells(2nd well contingent of the outcome of the first) and get their past costs repayed.
Firstly, OEl doesn't have the cash to drill the big wells all by...
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1.2¢ |
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Mkt cap ! $57.54M | |||
| Open | High | Low | Value | Volume |
| 1.3¢ | 1.3¢ | 1.2¢ | $104.4K | 8.704M |
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| No. | Vol. | Price($) |
|---|---|---|
| 7 | 10331121 | 1.2¢ |
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| Price($) | Vol. | No. |
|---|---|---|
| 1.3¢ | 9494694 | 17 |
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