sellers are coming in, page-33

After the success of P-1 it is doubtful this well would be a duster. I think, hope, it's more of a question if there is an upgrade or not. Us little guys have little influence on SP and the big intos have probably calculated the SP is at fair value until further news. And I see Mcquarie has just rated KAR as underperform hence I think the weakness in SP.

Sth America is not a clear cut picture. KAR presently have 100% in the acreage. They will have to farm part of it out for several reasons.

These subsalt wells are EXPENSIVE and gobble up the money. Where will KAR come up with that kind of money?

Development of the field if found is even more expensive.

Spread the risk. Even your Exxons and BP etc all have farm in partners on risky projects, just in case the worst comes to pass. And in the oil game the success rate is 50% or less.

So, they will need partners to fund all that. In which case they will probably also cede operatorship of the project because I doubt they have the depth of staff to operate a large subsalt project. These are extremely complicated, difficult wells and need experienced operators.

Operatorship, as Conoco is on Posiedon, means the operator gets all the first cash flow, called First Oil, until they have made back their investment, which can mean hundreds of millions of dollars. This includes project salaries, drill costs, pipelines, FSOPs and even the coffee. Then the partners get their percentage of sales.