NWE (ASX) Ann: Lockyer Deep Operational Update

Originally posted by alexei ii: ↑

@SkyPunter the bigger the field...the more wells you need to "prove" it. Any uncertainty gets heavily discounted. So the four wells and 3D seismic would be an absolute minimum...but the wells need to be evenly spread over the field...not all in one corner.

I think the boards acceptance of the t/o may have triggered the additional costs and hence depleted our funds - which would be a real piss of wouldn't it. Thats why we will need additional funds for wells 3 and 4.

So for the exercise, lets do some hypothetical numbers on what a cap raise via rights issue (my preference and imo the fairest to all) could look like:
Two additional wells plus some overheads NWE share (20%) is around $8M plus say another $2M for overheads - say all up $10M for the two wells and a years of running costs for NWE.
Assuming MIN wants to retain its % holding - MIN coughs up 72.3% of that, so $7.23 million is theirs. $2.77 million is for the rest.
So $2.77 million divvied up amongst 1.9 billion Holdout shares = 0.001457 dollars per share you currently hold (again, assuming MIN chips in).
So if you hold 1,000,000 shares, you would be up for approx. $1,457 contribution in this hypothetical situation. Thats $1,457 per million shares. If you have less than 1 million shares - it is a fraction of the $1,457.

Many things can vary vary in this hypothetical situation. among these variables are:
how many shares you get for your $1,457 - that will depend on the NWE share price at the time.
if MIN decides not to participate, in which case, if the minority shareholders decide to take up the shortfall - the contribution is $5,260 per 1,000,000 shares you own, and the minority goes from 28% to 30% and MIN will go from 72% to 70%.

IDK if Ive missed something, but it does not seem too scary to me. we all share your concerns re this. atm everything is in limbo because of the open offer. But I agree the directors should be held to account- esp over the LKR 3 and LKR 4 well locations. They should stick to the original plan which was to decide on these after the 3D and LKR2 nd NED 1 are in.

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Alexei ii great analysis.
Makes it easy to calculate how much we will contribute for every 10 million raised.

I have some background in mining and a litle in o&G but not sure how many wells they would need to feel comfortable before commissioning the processing plant.
If they do a cap raise they may decide to raise funds for the next 2 wells as indicated, plus further drilling and the processing plant.
It could add up to a reasonable sum.

The biggest thing in our favour is that any cap raise will be after the next well and we all expect some rerating from that.

Regardless, I will find the $ to take up any rights.