I gather that cash flow management is the source of a lot of the...

I gather that cash flow management is the source of a lot of the present angst with this stock.

As Davisc4 and others have repeatedly pointed out, RFE management have been very poor at projecting a cash flow strategy to the market.

I believe that a capital raising at these SP levels would be suicidal..

One potential scenario that may be open to RFE was alluded to in the December interviews:

COO, Chris Girouard stated:

"On the forward program, we are looking to drill up to 45 operated wells in calendar 2014. Importantly, the lease expiry schedule only requires 28 wells to be drilled in 2014. The remaining 27 wells that need to be drilled to HBP the acreage are spread over 2015, 2016 and beyond. So we have a lot of flexibility in the forward program."

If they did drop drilling back in 2014 and 2015 to bare minimum for HBP, then Capital spending would drop back to about $7.3M per month or $22M per quarter.

This will slow revenue growth, but if we assume the following production rates net of royalties, then I gather revenues will look like:

Mar Q 2014: 2600 Boe/d Avg Net of royalties = roughly $15M revenue @ $90 / barrel + gas sales.

Jun Q 2014: 2850 Boe/d Avg Net of royalties = $16.5M

Sep Q 2014: 3100 Boe / Avg net of royalties = $18M

Dec Q 2014: 3350 Boe / Avg net of royalties = $19.5M

If we have standard operating costs of $4M ($2.0M General & Administration costs and $2.0M production costs) and interest of $1M, then cash deficiet for next few quarters might look like:

Mar Q 2014: Cash flow -$22 + $15M - $4M - $1M = -12M
Cash position = -$65M - $12M = -$77M

Jun Q 2014: Cash flow = -$10.5M
Cash position = -$87.5M

Sep Q 2014: Cash flow = -$9M
Cash position = -$96.5M

Dec Q 2014: Cash flow = -$7.5M
Cash position = -$104M

If we continue this through 2015, (and if my rubbery numbers hold up), by Dec Q 2015, revenue would be $25.5M per quarter, and cash flow would be approaching neutral (-1.5M for quarter).

Cash position at that stage would be ~-$120M and we would then be in a position to start chipping away at debt with positive cash flow or at least consolidating it as long term debt.

Anyhow, just my thoughts... I'm sure some holes can be found in my logic.