Some exiting proportional ownership issues are about to arise from the latest developments.
Rio may have thought a 15% stake in EXT was at one time a strategic one, but on reflection, I think it was established on the rather arrogant assumption that they would more or less 'inherit' Rossing South, and before they realised what they had. For RIO the issue now two-fold...Ownership or Control. They are now both distinctly at risk. Perversely, that 15% stake effectively has them by the apricots. KAH et al is now explicit in its communication to the energy industry that EXT is for sale at the right price once near term milestones are achieved. If serious players can stump up the money and we are happy to call it a day, then 75% of the business is effectively up for grabs (assuming Rio still can't see the elephant in the room). This delivers absolutely nothing to Rio but humiliation, complete redundancy in the Namibian region, pissed off shareholders etc etc. Clearly EXT management are not focussed on stitching up offtake agreements because they could have done that last year with the maiden resource, and NOBODY but NOBODY puts 19 rigs to work for any other reason than to get the sale ducks in a row, and they don't need the money to keep drilling. The only thing they haven't done is call it 'Rossing Waters' and put it on Realesate.com.
The cheapest cab off the rank will be the first one, and they're lining up.
EXT Price at posting:
$7.28 Sentiment: Buy Disclosure: Held
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