Hi Scotchman,
To the extent that the deep play may in the future be found to extend onto those lands acquired in the September 16, 1998 sale, I guess we could say that FST gave up a 5% interest in those lands, at cost, to Dynamix. Other than that, the Dynamix deals as outlined do not impact the 2-22 deep play. The deals only impact FST's interest (but not TKE/DAL/LEY interests) in the shallow reserves.
It looks to me like FST has simply done some deals to be able to "keep up with the program". They may be unwilling (or perhaps even unable due to security regs??) to issue more equity at current prices. Farming out their interests will enable them to proceed quickly with development.
1. Suggests that FST has now finalized the farmout of their Cooking Lake "Zeta Prospect" which is a high-risk, high-reward oil prospect. Apparently it is expected to spud in November. While no doubt a very important achievement for FST, this event has nothing to do with Strachan 2-22.
2. Dynamix is paying 40% of FST's 25% share of costs of the shallow development well. By farming out, FST gives up 10%BPO/5%APO of its 25%interest in the shallow zones to Dynamix.
3. I would view this as completely "normal" since Dynamix had obviously already agreed to farm in for a 5%APO interest in the nearby Strachan lands before September 16. Dynamix would be entitled to participate as to its APO interest in "hereinafter acquired lands" under a conventional farmin agreement.
Overall, it is an indication to me that FST is ready for more near term drilling.
Later,
grayhairs |
