It is an incredible value buy. Unfortunately it got diluted, but anyone topping up around these levels will make a multiple of the investment within 18 months.
Once the first wells are producing, Cuadrilla itself becomes bankable. They can then raise capital for further development. Built balance sheet, and drill some additional wells. The grid connection won't be very expensive, it will just be about creating more gas flow. The pad has been built, all investments done. Centrica will pay up its share, so we will be increasing cash flow in a major way.
I don't see any further significant capital raising after this one. Cuadrilla itself has no debt, so it can raise a significant loan package once the flow testing has been done. So, first the Centrica money for another 4-8 further wells. Then Cuadrilla can just take a 50 million loan to just drill horizontals. Massive cash flow is just around the corner. This year it will still be small, 2019 will be the massive increase in turnover and volume for Cuadrilla.
AJL Price at posting:
43.0¢ Sentiment: Buy Disclosure: Held
