flows and capital raisings

Stating the obvious, there are 3 possibilities regarding flows:
1/ The rates are next to zero, in which case with the time passed since the workover, we'd better pray
2/ Rates are fantastic, say 14mmcf/d from the 2 reworked wells
3/ Somewhere in between, the wells not being at full capacity but improving/ showing promise

Regarding the capital raising, Marion would need to show these "sophisticated investors" some indication as to where they are at in relation to the above 3 scenarios. If scenario 1/ is the case, I doubt they'd participate. If scenario 2/ was the case, then the directors would have released this before the raising and thus getting a much better price with less dilution. Also there'd be revolt from SHs knowing these investors got in cheap at their expense.

I suspect scenario 3/ is the case. To get the raising done at a reasonable price Marion would need to show that there is light at the end of the tunnel. I believe to appease these investors they'd need to show flows and probably some insight into the sale process. Marion is already treading on thin ice regarding continuous disclosure, so they really would need to release this information to us as well! We'll see in the coming announcement.

So what happened to the sale?
Remember for what seemed like an eternity, they told us countless times that they would release flow rates when they were stable. Stable flow rates were all important. We know they went into the sale process without these stable flows. Why? my guess is that they were running out of time & wanted it complete before the directors options expired. If you believe the rumour mill, they stuffed up the drilling & fraccing of the wells, but they are salvageable. That would explain the current workovers. I have never heard of new wells needing a workover before, - usually old tired wells need this.

It would seem they were right originally. They do need to demonstrate stable flow rates. My guess is that a potential suitor unofficially said they'd give them $xx, as is, but if they wanted anything near their asking price they'll need to prove production. Waiting to prove production was probably a good thing to do, especially as the gas price has inproved over 50%.

Having said that they do need to prove production and they need finances sorted so they can show any potential suitor they have the ability to wait till next northern summer when gas prices could be even higher. Remember with higher prices the Reserves will increase.