Consider: banks / financiers lend on proved reserves (and at present - proved developed reserves), typically 60-70% of the NPV (based off current forward strip).
This was US$153.4 mill at US$101 oil. At US82 it is circa 100-120m .......so at 70% of that - a new financier will be willing to lend 84mill or so. Banks / financiers do not take "price risk" ...so RFE will be "encouraged" to hedge forward production to ensure cashflow is available to service any replacement debt......
So it should be obvious that there is an (equity) capital requirement of circa 30-35m .........(100 - 84, plus net payables).....
the "best" answer for RFE's long-suffereing shareholders would be a merger with another listed ASX oiler (that has a balance sheet that is able to carry the debt load, plus forward capital commitments of RFE).
the other answer - will be an extremley highly dilute cap-raise so the company actually survives.
if you are buying this stock - you do need to understand the risks. Given management has had circa 18-months to do something abt this - and chosen not to .....this is my definition of "brave" .....
- Forums
- ASX - By Stock
- RFE
- Ann: Re-financing Partner Selected
Ann: Re-financing Partner Selected, page-62
-
-
- There are more pages in this discussion • 45 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add RFE (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
LPM
LITHIUM PLUS MINERALS LTD.
Simon Kidston, Non Executive Director
Simon Kidston
Non Executive Director
SPONSORED BY The Market Online