Hi BoonTime There are no cost overun's...The said overun's are related to repayments of loan...Lets not forget this debt of which it does come free...It has a cost but importantly can be paid back while equity is for ever...
What would you rather...Giving away 40-50% of your clip each year and for every year or repay a small debt over 5 years....The original term sheets with off takers were for a 3 year term how ever Pareto from due diligence asked for a 5 year term...Enter Wogen
This gives them greater comfort that the loan can be repaid while also there is no revenue in first portion of development while repayments are to be made every quarter on time and on budget...It has been budgeted for and Pareto have launched the bond issue after months of due diligence...Due diligence also included 3 sets of lawyers all written into law in new jurisdiction where arbitration is upheld....All parties would have to agree from GOT,Off take partners,Pareto and Management...This was touched on at the AGM....an arduous task but achievable...Management Pareto and all others parties have proven this point...
@spid81 touched on the 3 year term being a delay point where the information is already provided with Wogenagreeing to a 5 year term up from a 3 year period with a spot market mechanism being part of the deal...Interest for 5 years agreed to and matched by off take term sheet agreement...10-30 TPA...The spot market mechanism was commented at the AGM to be a spot price at 3 months prier to delivery. Delivery is technically once delivered and stored in the shipping warehouse...A complete 80 % payment at this point of sale is achieved with an off take partner..
In summary all interest is added to original capex plus this is for a 5 year term...not a 3 year term...Cost blow out or budget for debt funding allowance....interest rate repayment added to capex...
A couple of comments first five years >20 TGC from surface...Modeling done at 16% TGC with 87% recovery...Does any one relies the 3 domains at surface were not counted in modeling...?
