A POST ON GGE I know you dont like a over billion of script..worth a read
To those disappointed by the CR set at 1.5c IMHO I think you're jumping the gun. Given GGE is a micro cap stock under 2c it is exposed to extreme volatility.
In these cases the issue price is usually set well below the closing price to present a reasonable discount for potential investors by limiting risk that market price could offer the same.
Hey, we're lucky they didn't throw in a few free 1 for 1 "piggyback" options etc. That would really provide an unfair and discrete discount that could really cap the SP moving forward. Nope, this CR is nice a simple IMHO. Very well timed and we get to participate.
Let's look at the dilutionary effect of this capital raising. I don't know if it's been pointed out already but the proposed new issue adds a neat additional 50% script to the register (Well I suppose that's obvious with the 1 for 2 structure!).
But with such a small MC and with a field that contains potentially 520 BCF and 4.5 MMBO we cant be too disappointed IMO.
Multiple high quality targets have been identified from the recent 50 sq mile 3D seismic survey and as the technical work continues, it is likely to generate significantly more prospect and PUD"
A few MC stats:
Current
Ordinary Shares 940,714,198 = MC at 1.9c is $17.8m (ex unlisted options).
After CR
Ordinary Shares 1,411,071,297 = MC at 1.5c is $21m (ex unlisted options).
Ordinary Shares 1,411,071,297 = MC at 1.9c is $26.8m (ex unlisted options).
No use factoring in the $7m into an EV as this will be quickly absorbed by the busy drilling program installed over the remainder of the year IMHO.
(Warning: The additional analysis below is simple and based on my unprofessional opinion)
Napoleonville Reserves potential: - 520 BCF = 520,000,000 MMBTU = $2,475,200,000 (GROSS) so say average 50% share to GGE = $1,237m
- 4.5 MMBO = 4,500,000 BBL = $346,455,000 (GROSS) say average 40% to GGE = $173,227,500
(and my guess is that we could see further upgrades)
Well#6 (downdip #1) 200 BOPD = $15,398 p/day = $5.6m p.a. (GGE share at 39.5% = $2.2) 2,000 MCF = $9,520 p/day = $3.74m p.a. (GGE share at 39.5% = $1.37m) (NB - As Well's #4 & #6 are part of Dugus & Leblac I'm not too sure re the potential flow rates, but for this exercise have kept them the same as #1)
Total annual revenue for GGE = $25,486,284 if all 6 wells are successful. Now that rough estimate of annual revenue is roughly equivalent to a fully diluted MC of GGE post CR. And this is only the start as they have at least 60 leads to assess and IMHO of which we should hear more soon...
The Company as continued to make significant advancements in prospect development have been undertaken internally converting 13 leads into prospects.
Over the coming weeks the Company will be providing an investor update to the market with respect to these prospects."
These guys aren't mucking about!!!
There is no doubt IMHO, if initial flow rates for Well#1 are up to expectation, 1.5c will be a distant memory and all shareholders will be grateful for the opportunity to participate in the CR.
Given the lengthy drilling program profit takers and possible downward pressure from the CR will be easily absorbed by the large volume that GGE will continue to attract.
Now given this, I'm not going to deny that the ride north will be a bumpy one however I do think we'll be leaving the 1s behind pretty soon if Well#1 comes through with the goods.
Accordingly my money's still on a break above 2.1c before the end of this week.
All JMHO and please DYOR....
GGE Price at posting:
1.8¢ Sentiment: None Disclosure: Held
(20min delay)