By the way, I think they will need more than $10m of financing by the end of the year.
Pay of debt facility - $2m G&A - $1.5m Aje exploration well - $2.5m (expect circa $40m gross cost) HW3 appraisal - $5.5m (expect circa $35m gross cost)
Total cost = $11.5m
I know they may get something from Sterling by the end of the year (end of 3rd exploration period), but I would favour a partial sale of the Bargou permit of required as I think 5% could generate some good cash. At 27m barrels of contingent resources to JKA, 5% is about 9m barrels, which upfront they may be able to get about $13m for it. I think they should be able to negotiate a further contingent payment upon getting to FID (or something of that ilk, may be production, may be earlier), which may increase total proceeds closer to $20m for the 5%. I don't think thats out of the ballpark (total value would be a touch over $2 / barrel).
Anyway, thats my preferred strategy, get some equity finance of hopefully arund $10m and then progress the sale of this 5%, which would provide JKA with a good source of cash to progress their projects and potentially look at expanding the portfolio.
JKA Price at posting:
8.3¢ Sentiment: Hold Disclosure: Held
