I've been seeing a few posts making a lot of misinformed posts...

I've been seeing a few posts making a lot of misinformed posts on the contingent payments.

• First of all, it's a contingent payment, so it's not guarantee, you can't just chuck it in the cash and say they have 1.25 in cash.

• Second of all, putting it straight to the cash balance is incorrect, as it's 1) contingent but 2) will require FAR to continue to Dec 27. This means cath and her cronies will funnel out 5m/year for 6 more years, reducing the value by 30m. That is a worst case assumption, since you'd hope the substantial holders will force the board to take an 80% to 90% cut if we become just a royalty shell. If Bambo fails (hopefully not), then major holders may feel they would be better selling to WPL for say 50%, 27.5 now, save the board fees, and get the cashflows now, which is worth more.
• Thirdly, it's unlikely we achieve all of the payment. The terms are 45% of our entitlement barrels (that is the stake we had 13.67%) over a maximum of the first 3 years of production (or 55m) multiplied by Oil Price - 58.

Sangomar will average likely around 90000bpd over the first 3 years provisioning for ramp up and shuts (Woodside quote the fpso capacity at 100kbpd peak). That is ~32 Million Barrels per year or 95 million barrels in 3 years.

At $60-$65 Oil, the rough average 36 months trailing average ranges for the years from 2017-2020 the payment would be -
$2 to $7 per barrel x 95 million x 13.67% x 45% = $11.68M to $40M.

Keep in mind this is average over 3 years, like in 2018, Oil may spike to 70-75 in the period (or drop to 50-55), but the assumption here is average price.

To get full payment, and assuming Woodside have no hiccups and produce at 32M per year from the get go for 3 years from first oil (and there isn't a delay to first oil of more than 1 year, i.e. first oil happens before Dec 24), they would need 67.5 US Brent average for the period from 23-27.

Not impossible, but not guaranteed. A slow ramp up, a year or 2 of depressed prices, a delay in first oil, and it could be considerably impacted.

Anyway, hopefully we get back the good news about a massive Bambo & Soloo resource in the next few weeks and will go from a micro cap to a small cap or even mid cap and the contingent payment will be an insignificant aspect and small part of history.