My concern at the moment is any delays to the Aje development timetable. With oil prices falling, companies will ut capex budgets, and as Aje is not a currently producing field and will be a relatively small producing field initially (10k bopd gross) then the returns on this aren't that great for some of the partners and any decision on development may be deferred. On the counter side, capex budgets being trimmed will increase the supply of drilling rigs and therefore could have an impact on reducing drilling costs.
I've mentioned it before but M&A activity with a similar size company with some cash assets and preferably another near term production should be sourced or we are leaving ourselves open to equity raisings at depressed prices, particularly now with a BOD that have very few if any shares in JKA.
I would fully support a merger of equals with someone similar to APY, as they also have some cash assets (declining just like JKA's) but they also have a near term production asset and plenty of appraisal / exporation upside in much the same way as JKA.
My main concern now isn't the assets but cash financing in the lower end of the O&G market, there are a lot of companies out there with great assets, but their current shareholder registers will likely be diluted to extremes to keep the companies a float.
M&A really needs to be the game out there rather than equity raisings.
JKA Price at posting:
3.1¢ Sentiment: Hold Disclosure: Held
