Part 2/7:
The conversation opens with a proposal from Diamond, suggesting a "farmout" under a "drill-to-earn" scheme, where profits from new wells would be shared—with a split of 60/40 in favor of Diamond. However, the viability of this arrangement hinges on where the drilling will take place, particularly in the Val Verde Basin, a location rife with operational challenges stemming from illegal activities.
The operator highlights the logistical nightmares posed by the area's smugglers, emphasizing the need for stringent security measures. Basic operations such as leaving equipment on site overnight become a gamble, as equipment is at risk of theft. The imperative for a perimeter fence and on-site security indicates just how precarious operations in this basin can be.