Until Hess can take the seismic data (showing large reserves of oil and gas hopefully) to a proven production model, it is very doubtful they would offer up $billions to buy FOGA at this stage of the process. Firstly, by spending only $100 million over the next two years - they will earn the rights to 62% of the play right off the bat! Secondly, - we all know from past experience that the seismic data can be excellent but the gas or oil may not flow economically. Therefore, I expect Hess to proceed with the Beetaloo - as the prize is just too great an opportunity to miss, but the timing for any buyout of Falcon's portion of the Beetaloo would most likely be a few years away. Hess also has the added bonus of 10,000,000 warrants at 20 cents until 2015 - so they may have some added capital to throw at the buy-out when the time arrives.

I also think that O'Quigley's move to lock up SweetPea/PHUN's side of FOGA was brilliant - as it gives Hess more comfort in dealing with only one main partner in the Beetaloo going forward and not two that could have opposing outlooks (especially with Bruner at the helm of PHUN). This is also a big deal for Sweetpea/PHUN in that they immediately get some very needed cash, a more liquid stock holding and upside that wasn't quite as visible before the deal. Sweetpea/PHUN could possibly have held out for a better deal after the Hess announcement, but the positives for them of doing a deal before hand, and giving Falcon a stronger position with Hess, far outweighted the risks of waiting for something better after the Hess decision in my opinion.