Interesting no one has discussed ( that I can see )the Sept 30...

Interesting no one has discussed  ( that I can see )the Sept 30 option exercise cash injection




With USA gas prices pushing above US$5 a mcf for Henry Hub and looking to go higher over the winter period.

They repriced legacy  Appalachian production of 3.6 MMCFFGPD to US$3.91 pec Mcf in June .... If the rest of the 9.6 MMCFGPD or 6 MMCFGPD is selling at spot in line with Appalachian prices which are selling at ~US$4.6 per MMBTU or Us$ 4.77 per MCF . The spot gas prices in the Appalachians and USA in general have risen by US$2.3 on average since June.

# https://www.eia.gov/naturalgas/weekly/archivenew_ngwu/2021/09_30/


If the MPH gas production was marginal at best at the time of the purchase, the margin they are getting now must be well over US$2.3 per MCF for the uncontracted gas. Company now just on the  current spot gas production  ( excluding contracted gas, NGL , oil production and inventory  sales) should be US$5 million cash flow positive annualised.

As @Sector pointed out, their unaudited accounts stipulate the annualised from the MHP loss acquisition if done in July 2020 rather than Feb 2021 would have been $1.9 million on revenue of $15 million




But that is based on gas, NGL prices during the period.... prices for both have almost doubled since then.

No concern for me about the ~US$ 8million well abandonment costs classed as non current liabilities as the current Kentucky legislative requirement is to abandon 10 wells a year


13/5/2021 Operations update

At an industry average of US$20-50000 per well  this is a very manageable  annual cost to the company  .



The " fueling crypto " deal is also interesting because this lateral thinking if it transpires will have the potential to turn around  disastrous  loss making Colorado acquisition  into a source of long term cashflow. Reactivating fallowed oil wells and using the associated gas which cannot be flared into an income stream in addition to the oil sold is a novel solution.

Having said all that, in 2 minds about this one . The MPH purchase seems to have turned out to be a master stroke, but the management " issues" are a worry. This delay in producing audited accounts is just another X in a lone line of worrying X's.

Still just watching here but the significant price increases in gas and NGL's  certainly make the current ~2300 BOEPD production revenue materially cashflow positive enough to warrant closer attention.

cheers

Dan