Ann: Divestment of Hofco Oil Field Services, page-17

As a followup to my previous posts in this thread: having gone through TTN's full-year results today, I have concluded that my speculative-buy proposition on TTN no longer works.

As per my initial post, my best-case scenario was predicated on 1) revenues not falling much further than DH14 levels and 2) the company being able to cut expenses at a rate that exceeded the decline rate in revenues.
Quite evidently, the fact that revenues collapsed from $30.9m (ex-Hofco) in DH14 to just $12.1m (=$43.0m-$30.9m) in JH15 shows that 1) is not happening and 2) is simply not possible, at the present level of revenue.

Looking at the Net Liquid Asset Value dynamics (NLAV = [Current Assets]-[Total Liabilities]), I estimated a NLAV of $7.2m as of May 15th; that was based on Dec 31st balance sheet figures plus the cashflows from the Jan15 capital raising and the Hofco disposal. As of June 30th, it looks like NLAV = $2.9m-$3.4m = -$0.5m (this is before the expected $2.2m tax refund). This is a deterioration in NLAV (very much akin to a cash burn rate, in absence of any meaningful capex) by $7.7m over the space of six months. At such a rate, and in absence of material contract wins, new financing will likely be needed pretty soon.

Asset sales may be an option but, given that the current book value of the drill rigs is only $9.5m, and Royal Wolf (who are currently owed $8.7m in the form of non-cancellable operating leases) appear to have first priority on the assets of the company, it doesn't look like that would make a huge difference.
Therefore, it seems to me that, unless new meaningful contracts are won, the only route to avoid insolvency is by way of substantial shareholder dilution (new debt doesn't look likely to me, at this stage).

As I personally have very little (if any) visibility about the likelihood of the company being able to secure new contracts (and what the associated margins would be) over the next six months or so, I assessed that taking the loss (roughly 50% of my initial capital outlay) on this punt of mine and moving on was the most sensible thing to do.

All IMHO, DYOR and GLTAH.