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Ann: Credit Facility Amendment, page-17

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jophda

4,791 Posts.

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21/01/21

12:22

Post #: 50337913
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Originally posted by gdn001: ↑

Ron,

Risk is fairly high at the moment.
Hopefully it turns out OK.

Firstly, I would say that the new management (Utsler) is orders of magnitude better than past management (MA and Jeter).
Unfortunately, he has to deal with the unfortunate GC 21 outcome.
This assessment is based on the terms of the Talitha sale and the renegotiation of the MB terms/conditions.
Both could have been much worse IMO.

If GC can be sorted (by 31/7?) then OEL should be fine (no need to raise capital).
It is not clear to me if a solution needs to be (successfully) implemented by 31/7.
I suspect (hope) that it is that a (possible) solution is identified, and the (approximate) timing of the work is known/agreed.

If GC can't be sorted in the timeframe announced, then a lot more will be riding on the Talitha result.
I suspect that the timing of GC conditions (31/7) and Talitha escrow (30/6 - which is very short) is not coincidental.

If GC can't be sorted, then I suspect plan to save the company's bacon, may be to sell all or part of OEL's PANR stake to appease MacQuarie.
If Talitha is successful, then PANR could double or triple in value.
Selling the PANR stake would clear a large chunk of their debt.
If Talitha is a duster, then the PANR share price would tank, and sales proceeds would only clear a small portion of the MB facility.

Talitha will most likely find oil. It is a higher up the structure from an earlier discovery.
The main risk for Talitha is that the oil can't be commercially extracted (result of the discovery well).
In summary, good news (there is oil) comes first, and bad news (can't get it out) follows after additional work.
This scenario could save OEL's bacon.
PANR share price reflects "there is oil here"
OEL sells (some/all) PANR (essential if GC can't be sorted).
PANR share price tanks "can't get it out"

I suspect that something like the above is Utsler's plan to manage OEL's risks/predicament.
I believe that MU has done an excellent job given the horrible hand that he has been dealt by the incompetence of previous management.

Expand

I think your analysis of the Talitha drill is a real possibility , certain to be some hydrocarbons there.
The holders of OEL are not escrowed .
The BOD has denied its shareholders the very large if not sustainable increase in the OEL share price that was extremely likely during the drilling of the well even if the well ultimately was not commercial.
If the well did prove to be a commercial success then their funding problems would be largely solved.
PANR has no plans to develop the field and go into production.

They did say they were fully funded to participate.
I am sure that was not a lie.

OEL Price at posting: 1.2¢ Sentiment: Hold Disclosure: Held
4 Upvote

0 Great analysis

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Ann: Credit Facility Amendment, page-17

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Ann: Credit Facility Amendment, page-17

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