Whitenoise, I don't think freeport will be offering anything prior to spudding. I hear these buy-outs & takeovers talk all the time on HC but it's all nonsense.
Have Conoco Phillips or Cairn taken over FAR in Senegal?
Has Tullow taken over PCL in Namibia?
Has BG taken over PCL in Kenya?
Has Tullow taken over SWE in Kenya?
Has Ophir taken over WHN in Seychelles?
Did Galp go for TPT pre-spud Morocco?
If commercial quantities of oil are successfully discovered & appraised in Mazagan, then possibly in 2016 or later, Freeport may want to buy-out PVD's interest for a considerable sum & we will all be very happy with the share price well before this event takes place, if it does!
Meanwhile, could you please explain why **on is 'dead in the water' & why 'Madagascar is all yours'?
Actually Madagascar is partly Exxon Mobil's, who in a year or so will be drilling an estimated 1.2 billion barrel prospect next door to PVD's block, with the same partner (Sterling) as us:
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MADAGASCAR
Sterling's Ambilobe and Ampasindava blocks are located in the Ambilobe and Majunga deep water basins, respectively, offshore north-west Madagascar. They are both undrilled but offer large scale exploration potential.
These blocks have also seen significant progress during 2013. Exploration activities had been delayed due to the political instability in the country following a change in government in March 2009 which had not been recognised by the African Union or by the United Nations. In September 2011 the political parties in Madagascar agreed to a process, prepared by the Southern African Development Community, which involved the establishment of a transitional government with the objective of holding democratic elections. Two rounds of presidential elections were duly held in October and December 2013 and were declared by international observers to have been free and fair.
Hery Rajaonarimampianina was inaugurated as the new president of Madagascar in January 2014 and at the time of writing, discussions were continuing on the formation of his new government.
During 2013, the Management Committees for both Blocks, which are chaired by OMNIS, the state regulator, agreed to prolong the current exploration periods of both the Ambilobe and Ampasindava PSCs with each contract having the same remaining duration and obligations in the current exploration periods as existed in March 2009. These agreements were formally ratified by the Government of Madagascar in September 2013 and the current exploration periods of both PSCs now run to September 2015.
Ampasindava (WI 30%)
Overview
The PSC for Ampasindava is in the third phase of the exploration period with a minimum work commitment of one exploration well. The large Sifaka prospect is ready to drill and has been independently estimated to contain gross un-risked best estimate prospective recoverable resources of 1.2 billion barrels (RISC Competent Persons Report, March 2008). With the return of Madagascar to political stability, ExxonMobil Exploration and Production (Northern Madagascar) Limited ("ExxonMobil") (WI 70% and Operator) and Sterling have resumed exploration activities including well planning and a 1,314km 2D seismic acquisition programme was completed on the Ampasindava Block in December 2013. The data will provide improved sub-surface imaging of the Sifaka prospect and potentially mature additional prospects within the Ampasindava Block to drill-ready status. Processing of the new data is in progress.
Following the farm-in by ExxonMobil in 2005, Sterling's costs are carried up to a fixed amount. The cost to drill the Sifaka prospect is estimated to exceed the remaining carry and the Company is conducting a farm-out process to introduce an additional partner and reduce its current working interest in order to cover these costs. It is currently unlikely that an exploration well will commence drilling before 2015.
Sterling estimates that ExxonMobil's remaining carry at the beginning of 2014 is $30.3 million towards the gross cost of exploration activities.
Future Activity
Following acquisition of additional 2D seismic data in 2013 the focus in 2014 will be on processing the new data in conjunction with reprocessing of the existing database, followed by a phase of interpretation. Well planning will continue in order to target drilling in 2015 or 2016.
Ambilobe (WI 50% & Operator)
Overview
The Ambilobe PSC is in the second phase of the exploration period and all work commitments have been fulfilled. A number of Cretaceous and Tertiary leads have been identified, located in both shallow and deep waters, which will require additional seismic data to develop into potential drillable prospects. To that end, Sterling has commenced planning a 3D seismic survey covering approximately 1,250km² which is scheduled to be acquired later in 2014. As there are no outstanding commitments this activity is entirely discretionary.
Sterling signed a farm-out agreement in November 2013 with Pura Vida Mauritius ("Pura Vida") under which Pura Vida has assumed a 50% interest in the PSC. Pura Vida has paid Sterling $1.25 million towards Sterling's past costs, and will pay all costs associated with the planned 3D seismic survey up to a maximum of $15.0 million. Following the farm-out, Sterling retains a 50% interest in the PSC and remains as operator.
Future Activity
Acquisition of new 3D seismic data will be the focus of activity in the Ambilobe block in 2014. With input from new partner Pura Vida, an area of the undrilled Ambilobe basin has been identified as the target for the 3D seismic survey.
If the pre-salt potential is good enough for Exxon to drill & viewed as good enough for PVD to invest $15 mil for seismic + some back costs to Sterling, then it's certainly good enough for me!!
PVD Price at posting:
42.0¢ Sentiment: Buy Disclosure: Held
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