otto energy bhp joint venture, page-25

Here is an example of the misleading statements by OEL:

In December 2008, Otto and BHP Billiton , entered into a conditional Heads of Agreement which set out the key commercial terms for the farm�]in by BHPB to SC55.

Otto retains 25% working interest
Otto will receive back costs for work completed to date
BHPB will pay full cost of multi�]prospect 3D seismic survey in 2009
BHPB will drill and cover all costs of 2 deepwater wells
Value of deal to Otto ~US$150M

So according to OEL the value to OEL is $US150MM on a 25% basis. i.e. BHP are spending $US600MM??

I would suggest that the total BHP spend is likely to be around $US150MM and the value to OEL is closer to $US37.5MM. This is typical of what you can expect from shifty OEL management - overstatement of value by $US112.5MM!

I'm sure it is an "honest" mistake though...

p1000