hess vs bhp vs the rest, page-15

Hi Occam

Though we do not agree on some things, I appreciate hearing the alternative view.

I thought this might be another point of contention between us. I do agree that any such deal could possibly (probably even likely) include provisions for price adjustment dependant upon ultimate certified reserves.

There is another reason I think Buru will wait it out as far as testing goes, which I'm not going to raise on a public forum.

In any case, testing to the extent required to prove up this immense in-place resource will require many 10s of millions of dollars. My contention is that Buru have a strategy in place which will bring these dollars to the table without the need for a further CR. So one has to weigh up the possible ROI outcomes of a further CR in the near future to finance the testing, against selling off some portion of the as-yet-unproven, and therefore somewhat risky, unconventional assets to provide the finance for this activity. And presumably such a deal would include an additional cash payment which could be put towards the pursuit of conventional targets.

In my opinion a farm down of the unconventional gas carries less risk. Simple as that really.

I certainly agree that Buru is well managed and indeed an excellent operator but at the moment they have a huge array of projects and potential projects on the table which must place a huge burden on this small, but rapidly growing business to coordinate effectively. They also have as yet very little experience with testing, let alone developing a tight gas resource. Some lightening of the load would in my opinion ease the growing pains in my opinion.

Consequently, I will be happy to see a substantial portion of the unconventional reserves farmed down and operatorship passed on to the farminee(s). This will allow Buru to devote the time, money and energy to that which they do have extensive experience with: finding and developing conventional oil reserves. In all likelihood Buru have as yet only scratched the surface in this regard.

Neither of us knows what is really happening behind the scenes, but I think we are in agreement that ES is a very astute man and that he will ultimately engineer the best outcome for shareholders.

Cheers