Analysis of the August 2017 Westbound Lease Purchases by Broadbean
Last December AEA and BEX were awarded 293 leases. Of these, the first round of a 115 were awarded on 07/07/2017. The awards were received on 12/07/2017. There wasn’t much point in sharing this info on the board at the time as all it would only have served further rife speculation given we were also still 'shut in'.
In accordance with DOG regulations AEA and BEX had 30 ‘calendar’ days in which to complete (from 12/07/2017). On this occasion, the full period was exercised and after the first round AEA and BEX purchased 54 of the leases and forfeited the other 61.
The forfeitures were processed first and 24h ahead of the leases that were purchased. Had people been widely aware of this then you don’t need me to explain what would have happened to the SP during that short space of time as 88e didn’t release the RNS until the following day…
For the JV in terms of acreage, (as per RNS) the first round equated to 109,817 acres awarded, of which 76,996 acres were purchased. That’s 70% taken up so far! That’s excellent news and very encouraging!
I believe Bomb has already provided listings on the leases and gone into the mapping etc.
178 lease tracts on the Eastern side are now due to be awarded on the second round. The timing as to when they are awarded is down to the DOG and this information is in the public domain so DYOR.
The guidance is that awards tend to be processed no later than 9 months after successful bid. That takes us into mid September (plus another month for bidder to decide whether to forfeit/purchase) so expect these to be awarded shortly and then the same process as outlined above repeats itself.
IMPORTANTLY:
The reason why all the leases weren’t awarded all at once (i.e. broken into 2 rounds) is purely down to the shear number of them and workload management.
The DOG batch leases and which ones to do first are done on a GEOGRAPHIC basis.
This time, the DOG chose to go from the northernmost Beaufort Sea Area wide leases to the southwest to the Accumulate/Burgundy leases in the North Slope Area. So other companies are included in this first wave too not just us! We’re obviously only focused on AEA/BEX portion however.
Therefore geographically grouped leases will have the same effective dates. There’s nothing in speculation that we are going West and binning East. Until the eastbound leases are awarded (this is imminent) and we go through this process all over again we won’t know the strategy.
