Horizon partner take over, page-16

Repsol in their press release said they were focused on production in OECD countries (presumably a reference to their difficulty in Argentina). Really hard to see how the PNG assets fit either of these boxes.

Wanga - no sorry not happy. Sure some of the required level of money to pay off the notes will be generated by Beibu and Maari, however they have to start paying back their $119m bank loan this quarter and there will not be enough money to do both. They seem to have persuaded you with a bunch of annualised charts showing EBITDAX is up significantly for 2014. No great surprise there, their production has increased dramatically because of China and for the majority of the year the oil price has been around ~100/bbl. However before the oil price drop they generated about $22m before G&A, before interest, before capital, before exploration and before paying down any debt. Since then the oil price has dropped ~40% and I seriously doubt that their net revenue will be unaffected by such a fall. You don't need to build a complicated cash flow forecast to see that by the time you suck out ~$10m/yr G&A, $10m/yr interest and drop revenue to account for the oil price and factor in paying back their debt that there is no way they will have enough for the notes without a significant rebound in crude price.

The next quarterly will be very interesting because it will tell us how much they are having to dedicate to debt repayment and how much their net revenue has dropped as a result of the crude price fall.