theory- another drawdown starting?, page-7

The actual drawdown is done pretty much instantly I'm led to believe. However Range have to give a few days notice to Duchess that we plan to drawdown funds.

That 'few days notice' I imagine is pretty much the same whether you're drawing down 1 million, 5 million, or 20 million, so I wouldn't anticipate much happening until next week when it's completed.

But a few days isn't much in the grand scheme of things if it means we get increased exposure to good prospects, or have the cash to drill plenty of wells without further dilution.

To put it into perspective- the 2 Georgia wells are costing $14m in total. Range have to pay $8m of this, but after that each well will be paid for on a 40% basis.

So $8m for the first 2 wells, then assuming the figure of $7m per well remains constant, we're paying $2.8m for each future well.

So a $30m drawdown will allow us to drill 9 wells, and that's not even factoring in the cash we had before all the drawdowns started.

Of course it's probably not all going to be put towards the Georgia campaign. But my point is- by exploration standards, our drills are very cheap, as they're onshore, and the depths are relatively shallow. It makes sense to have a surplus of cash in the bank to ensure we can continue this campaign well into the future even if we suffer a setback or two (which is life in the exploration industry unfortunately, although I do have confidence we'll strike oil in our initial 2 drills, nothing is guaranteed).

It's all about derisking projects as much as possible- and so far RRL have done that very well.