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Ann: Hydrocarbons Encountered in SM58 011 Well, page-35

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Little T

2,364 Posts.

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30/08/19

16:10

Post #: 40248152
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Originally posted by jophda: ↑

The big thing missing from their forward plan is how are they going to pay for it .

To bring the prospects in SM58 into production they need to refurbish and put in place the secondhand platform they own and hook up SM58 011.

They plan to drill two wells from the SM71 platform and one well from the SM69 platform all starting in Oct .
OEL will almost certainly fund their share of the SM71 wells but that still leaves two offshore wells to fund including contingencies .

Great wells to drill as very high COS and almost immediately into production .
They have not said any of the wells are contingent on finance or partner participation , so they have a plan .

The Market needs to know what combination of debt or Joint Venture or Capital Raise will be used to pay for these wells .
The BOD are very aligned as big shareholders and have shown they are prepared to support the company from their own resources .
However they may need to raise some equity and the sooner there is clarity about funding the better .Loan funds would be great if possible .

Once these three wells are in production they should be able to largely bootstrap the business in its forward program as they can as operators match the rate of spend to their FCF.

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I think they will have to raise $40 mill us to pay for platform and the next couple of drills .I am expecting revenue next September 2020 after all approvals .I think they will raise finance and not do a capital raise .

BYE Price at posting: 37.5¢ Sentiment: Buy Disclosure: Held
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Ann: Hydrocarbons Encountered in SM58 011 Well, page-35

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