Up to 2 weeks to rebid of bauna/tartaruga, page-3

Ok I spoke with Petrobras (top five guy)

So his point of view what this- they didn't know how long the courts would take and needed a reason to stop the process - hence Karoon being thrown under the bus with the Woodside argument.

Ok so he wouldn't answer questions on timeframe of how long the new bidding process would take but said it would be "expedited".

He said the bid process will most likely start in two weeks. He did say there he thinks the market will be better (read across more competitive for Karoon).

He said that he didn't just restart this process but all of the outstanding ones (check today's Petrobras announcement - there's a list)

He wouldn't tell me if the assets would be split or together.

I told him how upset I was that Karoon was thrown under the bus given the commitment they had given throughout the whole litigation.

Ok so not much else to say. My personal opinion is if karoon can bid the same money then they will probably win it. I just don't know how they are going to come up with that money.

My initial thoughts are that they shouldn't farmout kangaroo/echidna as that is a way they can get more equity with a partner in this whole process. For example - 300m usd cash. 300m for kanga/echidna - then borrow 300m. Means they can come to the table with
1. Operating status in Brazil
2. Assets that hopefully be used in conjunction with bauna
3. 900m in cash/equity of a 1.8b deal- (assume 1.5b for bauna/tartaruga and 300m for kanga/echidna)

If they do the above means they could get 50% of the oil output or 50k barrels a day once tartaruga comes online.

50k with an estimated $60-$70 oil price for 2018 and breakeven of $40 - gives Karoon FCF of 356m-534m USD a year.

The game is still on.. don't give up hope yet.. but it does seem Karoon will have more competition this time around. But in my opinion if karoon bids the same amount they should win it - remember one of woodsides reason for pulling out was Karoon was OVERbidding.

PB