texas underpinning, page-5

5-6p is an optimistic range on a Georgia duster (I'd say 4p is more likely- don't think it would hold 5p in this market), but as for insolvency- they could just sell the assets to prevent this. Even being hyper-conservative, Texas could be sold for $50m tommorow (P1+P2 is valued at $100m), and that would provide enough cash to keep Range ticking over until Trinidad is turning a decent profit. With that said- ultimately yes, if no more oil is found, and Range keep drilling expensive dusters, eventually they will be bankrupt- but we'd be talking years down the line after all assets are sold, not a matter of months from now.

It's high-risk now, make no mistake. I wouldn't feel comfortable holding at this point. At 4p it becomes a lot less risky- if 3p is reached I'd say you're pretty much guaranteed some kind of return over the next 6-9 months post-duster, though 3p is setting an over-ambitious buy-in price IMO (3.5p might just about be achievable, depending on the level Range is at before a duster is announced). Never say never in these markets though.