The corporate shift was the result of a change of power in the boardroom following a flurry of corporate deals, all pushing the company further down the e-commerce and technology road. The planned acquisition of six new business - all e-business and technology focussed - and two directors - one to the CEO's seat - saw the company clearly state to the market where it saw its core business.
In December, new chairman, Bill Shotton and other new director, Sandy Saunders, outlined a plan to vend the six businesses, and their estimated $90 million dollars annual income into CityView's balance sheet. The company has not revealed how it plans to pay for the acquisitions.
Meanwhile, the energy division, led by Mark Smyth, now vice-chairman, continues. The first well, Sebaya-1, was suspended by the operator who did not have strong enough blow out preventors to safely deal with the three high pressure gas zones encountered in the well. The operator, Medco, said it planned to reenter the well mid year with the appropriate equipment to test the encouraging results. It is likely, though not confirmed yet, that Medco will pay these drilling costs as negotiated by CityView as part of the farm in process.
As this article goes to print the second well in the program, Karasan-1 (CityView 16%), is about half way to its target depth of 4600 feet. According to Medco, operator of all the wells in the CityView program, Karasan-1 has an estimated recoverable gas resource of 389 billion cubic feet (bcf), which at a price of US$1 per thousand cubic feet, could be worth up to A$95 million to the partners.
The third well, Pidawan-1 (CityView 16%), is in a proven oil producing area with Medco having estimated recoverable reserves in the region of 52 million barrels of oil and 91 bcf of gas. The target depth will be 2,300 metres on trend with the structure which contains the Bangkudulis and Sembakung discoveries. A commercial discovery here could yield CityView in excess of A$30 million. The 30 day well is slated to spud in mid -to late February.
