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From an investor perspective the prospect of potential dilution is a factor when assessing the risk / reward of taking a position in a company. For example, if I were to assess that the forward value for AKK is 160m (Market Cap) for argument's sake then given the shares on issue I anticipate a shareprice of 10c per share. If we have the options exercised then (ignoring the obvious advantages of having a cash kicker ) the shareprice post dilution may be 7c (again, rough and dirty numbers). On this basis, I would probably take a slightly less optimistic view of the investment as my risk (1.8c) v reward (8.2c) has now been adjusted to 1.8 v 6.2c.

In the case of AKK this is probably not so much of a factor given the very low probability of the options being exercised at this stage.

It's probably a more pronounced impact where there are convertible bonds or notes in play as at the point of conversion there is no cash kicker for the company.

Overall - I think the expiration of the options is unlikely to have a material impact on the shareprice. It all really boils down to the JV arrangements in Texas and where they are at with Austin Chalk.

Just out of interest (this is probably more of a technical question than anything) ... assuming Austin Chalk comes on line, is it right to assume that this zone can be exploited without the potential of Eagle Ford being impacted (ie: can AKK use the same verical shaft from which the horizontal shaft for Austin Chalk is based to access the lower Eagle Ford Zone)? I am just wondering whether they can use the same vertical hole and save drilling money accessing lower zones if/when Austin Chalk is depleted?

This is something that I haven't ever fully understood as generally I don't take positions in O&G ... usually I focus on Copper Gold.