Q: I think you are going to get a few questions about the offer to buy out Gear Energy (GXE) for the heavy oil assets and leave the remaining assets in the new company called Newco (stupid name IMO). Does the deal seem fair to you? I realize you are not oil experts (since you can't be experts on everything) but I can't figure out if the assets in the Newco are any good. If the Newco assets and good and there will be a $110 million to work with maybe the deal is not that bad. Also, my understanding is the GXE has a lot of accrued losses so who would get the use of those losses? I assume the purchasing company who is getting the gear name would get those losses? If that company is paying taxes then those losses could be very valuable. So valuable that the the purchase price of $110 million is larger paid for from saving on income taxes, right? On the other side I understand that GXE has a lot of asset retirement obligations. Who will be liable for those obligations, Newco or the purchaser? I think these are valid questions that us light share holders should be asking!
5i Research Answer:
The spin out will be only called Newco until a better official name is chosen. We commented on...