SL, maybe its the way you go about it. Asking for opinions and then completely ignoring them seems to be the way you do things from my experience so isn't really going to generate the best discussions!!
In terms of funding, here is my view. RIA were hoping to keep the interest that they currently have in CI-202 by using RBL facilities, this is still potentially on the table, but completely depends on the sidetrack and the Gazelle-4 well, it certainly looks more risky than it used to and was probably why most havne't really spoken about funding here, as most peoples expectations were a several hundred million $ RBL facility would work fine. Bear in mind that they are not developing the full block straight away so I doubt that the development of Gazelle alone would cost $400m.
Depending upon the outcome of the sidetrack and Gazelle-4, funding plans may change and either look at further equity raisings or farmout. I always thought that Afrens proximity to the block with CI-01 (especially being as Impala crosses the 2 blocks) would mean that they may well be interested in farming in, or potentially Tullow, though neither really farm in at the point of development, but I suppose as it stands only really Hippo and Gazelle have been appraised, the rest are either exploartion targets or have had 1 or 2 wells drilled so are at the appraisal stage. Afren tend to farm in on low values, around $3 / 2C reserve in Nigeria, so expect something similar whoever farms in. At 50m barrels of oil and 396 bcf of gas (roughly 105m BOE), so therefore a 100% interest would be worth circa $315m. Assuming Petroci farm in for their 26%, farming out 50% of RIA's interest would be 37%, which you would expect a farm in contribution (either back costs or free carry) of around $116.5m.
I am hopeful that the sidetrack will work ok, there are a few things that I want clarified by IR and will probably call them today but until the sidetrack and Gazelle-4 are drilled, there is no real discussion required as the aim is still to move 2C to 2P. If they aren't successful then other funding options will obviously need to be discussed.
RIA Price at posting:
23.5¢ Sentiment: LT Buy Disclosure: Held
