The issue with cashflow for TEG is largely due to production...

The issue with cashflow for TEG is largely due to production costs at Cliffhead. On rough numbers TEG needs to outlay $1.5-2m/ month for three months production before getting it all back again in month 4. Once the PGY deal concludes we get $3m cash from PGY and can get out from under our remediation requirements. TEG will also benefit from the last offload payment which should add another few million cash. Once the PGY transaction concludes it will remove a lot of that financial, and psychological, burden.

In the worst case PGY transaction doesn't conclude by June, TEG has had to outlay 3 months production, A&G and $1.75m for Booth they should still have around $2m cash. While its tight they will also have a $5-6m receivable for Cliffhead production due to them in August.

The sooner PGY can get the minsters signature the better. It will provide TEG with some clean air to go and chase gas at Booth and oil at Becos.