The aim to spread the risk and exposure in the SJJV has seen QPN...

The aim to spread the risk and exposure in the SJJV has seen QPN reduce its percentage inthe Guijarral Hill prospect from 50% down to 20% and given Salinas a farnmin of 30%.

In return QPN has gained 12.5% Working Interest in SAE's Osso Bucco Prospect and also 12.5% Working Interest in SAE's Merlot project.

Now as indicated before when L&M Petroleum took an interest about September last year (pulled out a couple of months later) the indication then was that Osso Bucco would be the first of the two prospects drilled.

Presumably that will remain the plan. Estimated cost of drilling Osso Bucco was about US$4 million. Therefore cost to QPN of about US$500,000

Drilling of Osso Bucco will have to await the completion of Salinas reducing down its percantage share by at least another farmin.

Drilling Osso Bucco first would be a cheaper option for QPN than drilling Guijarral Hills at this stage ( US$0.5 m cf US$0.8 m.)
It could also produce a greater payback since Osso Bucco is estimated to contain 17.6 mmbo while Guijarral hills is estimated to have 5 mmbo
So 12.5 % of 17.6 mmbo = 2.2 mmbo for QPN from OB for US$0.5 m cost
compared to 20% of 5 mmbo = 1 mmbo for QPN from GH for US$0.8 m cost.

However commercial oil from either prospect very valuable to QPN.

How to pay for QPN's share ?
MF in the BRR mentioned that Bullseye was useful as a cashflow provider or as a saleable asset.