The cash position will run down a bit depending on timing of various payments for W7 and ED1 drills. As of end of Q3, we were sitting on 44mn cash and 47mn undrawn debt. Walyering is generating FCF of around 13.5mn per qtr (18mn revenue and 4.5mn cost of production). Assuming W7 drill cost was about 10mn (due this qtr) and ED1 drill cost will be 12.5mn (STX 50% share and due next qtr)...
By end of this qtr, our cash balance should remain at around 44mn given the Walyering FCF (after cost) of 13.5mn will offset the W7 drill of 10mn and staff/admin/corporate of around 3.5mn.
By end of next qtr, our net cash movement will be approx 13.5mn - 12.5mn ED1 drill - 3.5mn staff/admin/corporate = -2.5mn. So our net cash by end of next qtr should be around 41mn.
This is just a rough estimation as we don't know whether there is any outstanding payment due for seismic processing etc but some of that should be covered in the corporate cost. At the end of the day, if we do need some short term cash, I suspect the board may elect to draw down some of the available 47mn debt facility because at current share price, the cost of that debt will be far cheaper than the cost of equity.
618
STX Price at posting:
20.3¢ Sentiment: Buy Disclosure: Held
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