Hi all, Just love all this "wot dey gonna' do next?" stuff. So...

Hi all,
Just love all this "wot dey gonna' do next?" stuff. So I'd like to throw some more facts (and some wild guesses) that could have some bearing.

Facts:
1) The critical JV vote level is 60%. Need 60% to decide action.
2) This means that Petrosen is the Gatekeeper if CNE or COP cannot agree. If COP and CNE agree, its a done deal. If not, both will lobby FAR for their vote and then look to Petrosen to be the ultimate decider.
3) COP are on the hook for US$630k/d (bare boat) until May 2017 whether ORA drills or not. They dont have any low risk projects nearby as alternatives so they are going to want to be very keen to continue to utilise the ORA in Senegal.
4) Both CNE and FAR know this and will/should use this to negotiate next wells.
5) FAR must exercise the Djifere option in Oct 2016; but the 3D seismic will have only been fully processed maybe 1 or 2 months before this so theres not really a lot of time for COP or any other player to do a lot of DD before the option must be taken up.
6) COP has US$23B of debt and is very, I repeat, very sensitive about spending any cash that isn't critical to maintaining or improving cash flow returns.
7) Big coys such as COP are no longer being run by oilmen/women. They are now largely under the guidance of their bankers. This means that ALL discretionary spending is less than zero (and by this I also mean no cash for corporate acquisitions which bankers will only approved if it materially adds to their loan metrics. No....FAR doesn't do this)
8) COP would have by now spent an obscene amount on lawyers looking at how they could get out of the ORA contract. So far no luck.
9) Not only will COP (all with all oil coys) be madly protective of their balance sheets; they are also hugely protective of their reserve positions. Many/most of the big coys will, at the end of 2016 need to right-off reserves that will be calculated as no-longer economic and therefore will be excluded from the all important 2P figure. Senegal represents one of the lowest hanging (= no brainer) options to boost 2P.

Speculation:
9) If there is a JV drilling break to assess data; COP will be very keen to look at the many other West African opportunities and will be playing them off against each other with their ORA rig. I don't think FARs Djifere seismic will be sufficiently advanced for COP to have a crack. But there would be some interest in other places such as GB and the Gambia. Even Frank Timmis (if he's recovery from wetting himself) would have had a call or three with the mighty COP.
10) So COP will be looking for the most advantageous option to use ORA.
11) But my analysis is that financially and strategically, COP's best option is to continue using it to extend SNE or prove up other shelf plays. Fact is, SNE Senegal represents the lowest risk of adding material resources/reserves. That doesn't mean there isn't a better risk-adjusted opportunity on the west coast (and there are likely to be many desperate to fulfil obligations) but I cant see it.
12) COP will have also examined 'sole-risk' opportunities within the block. If the JV votes for a break, and its legally and practical enough to do, is it possible that COP could have stuck an offer on the table to sole-risk a FAN well?..something that both CNE and FAR cannot really contemplate at this juncture. But personally, I don't see any reason for anyone to go at deeper/higher risk when there seems to be so many low risk opportunities on the shelf. So sole risking (for a 3-4 times cost buy-back) could also be an option.
13) My reading of CNE is that they have/are examining project sale down and therefore are probably marginally more keen on taking the drilling break.
13) I also believe that Petrosen will be very keen for the JV to get to DOC as soon as possible and not want drilling to the end of COP's ORA contract (May 2017) to do so. Is it big enough now? Yes it is. Well, get on with it.
14) And again, the all important voting structure comes in. COP and CNE know that Petrosen is the arbitrator. The arbitrator doesn't want to see a disagreement or protraction of decision.
15) Bloody hell!....isn't that enough rubbish for one afternoon?

Cheers,