I have to admit that after posting all that I did actually check their financial position, to see whether a CR was needed. (I dont do very much FA, except to rule out stocks whose chart I might be interested in, for a long position)
& I'm none the wiser ????
Cash last qtr - 22.9m Expected outflow next qtr - 63.6m
(40.7m)
at first glance...... ????
then there is this...
*At 30 September 2012 the Group had a Reserve Based Lending (“RBL”) facility with a credit limit of US$300,000,000 with Wells Fargo. At 30 September 2012 the available borrowing base was US$131,000,000 based on the current level of proved developed producing reserves (PDP’s) and the Group had utilised the full amount available. Subsequent to the end of the quarter, and following receipt of the proceeds of the Group’s corporate bond issue, the RBL facility was repaid in full and an alternative Asset Based Lending (“ABL”) facility was obtained from Wells Fargo. The credit limit under this facility is $50,000,000 and is currently undrawn. This facility carries an interest rate of LIBOR+3,25% and can be drawn at any time for use in the Group’s US Oil & Gas business. In addition to the above, at 30 September 2012 Linc Energy had access to a $120,000,000 corporate line of credit facility with a subsidiary of Fortress Investment Group LLC which can be drawn at any time. At 30 September 2012 the Company had utilised $90,000,000 of the facility. Linc Energy also announced on 6 September 2012 that it had reached agreement with Fortress to extend the term of the facility by approximately three years to 24 July 2015. Subsequent to the end of the quarter, and following receipt of the proceeds of the Group’s corporate bond issue, $67,000,000 of the line of credit was repaid, resulting in a remaining balance of $23,000,000. In conjunction with the bond issue, the total credit limit on the line of credit facility was reduced to $90,000,000. There are no restrictions on the availability and use of funds under this facility.
and then this....
1 The significant ramp up in exploration and development expenditure in the next Quarter relates to the Umiat winter drilling program and the ongoing drilling and recompletion program in the Gulf Coast. Both of these are funded by monies raised by the bond issue. 2 The Group expects to generate at least $30.0 million of revenue in the second quarter from Oil sales and Clean Energy consulting income
So in the end as I dont really follow this one closely, I'm not exactly sure if it will all work out OK, or if they will need to raise capital (which would allow the shorts to cover....and win).
If you could answer this question with confidence, you could probably take a nice position (either way)
Chart says possibly an accumulation zone forming, and two (maybe three) possible ways of trading it on the "long" side. Accumulate with the pro's at the lows (higher risk/higher potential reward). Buy a low volume test of supply once it breaks out (lower risk/lower reward). or you could trade the range, buy the lows of the range (on the first strong bar) and sell out near the highs of the range on the first weak bar (medium risk).
tough call....
Tom Williams always says, "just trade the chart as you will never find out the real truth" and "there are no friends in the stockmarket, if you need a real friend, buy a dog".
I imagine there is a plan for this one, if the pro's are involved, there is always a plan. I just cant work out exactly what that plan is right now, with confidence, probably in hindsight it will be easy.
