Hi all I think one needs to ask when will the company be cash flow positive. The issue with AKK is if one looks as the ultimate margins ( net revenue interest minus opex) and compares that with simple running costs of the business , it's hard to make the case how a company that will have over 2 million shares on issue should be trading much higher than currently. For every 1 cent appreciation it will add 21 million to market cap . The company will not become cash flow positive with these funds in my opinion and will need even more funds .
Over 2 years ago the company was targeting 500 bopd - that changed to 500 bopd gross . The administrative burn rate is nearly 3.3 million per annum. These companies ( akk , mad , Tte, Stx , nen, ) all fail to generate meaningful cash flow returns and instead keep taping investors to keep the wheels going . As they do the company and each shareholding gets further diluted and the value of each asset and it's revenue stream also becomes diluted to buggery .
How much money have AKK raised vs market cap - this is the best definition of whether they are growing or simply sucking in investor capital . Furthermore work out how much has gone to admin over last 3-4 years . Thus in my view these kind if shares rarely create wealth , but they do reward management through generous salaries
Don't attack me - prove me wring with numbers if you can
AKK Price at posting:
1.3¢ Sentiment: None Disclosure: Not Held
