re: asx co announcement hi t/rex, I like to try and be realistic...

re: asx co announcement hi t/rex, I like to try and be realistic and do not get carried away with any rose coloured spectacles or visions of grandure, remember Hotcopper is full of Bulls so some of my comments will not be favoured, however I like to give a balanced view and do not play for popularity stakes.It is the facts which are important.That said then looking at the company and it's net liabilities { long term + short term - current assets } particularly the deterioration mentioned before and the additional costs of the recent Duster drilled in the US it looks to me that the shares are Fully Priced at about 8 cents so anyone paying more is over paying, and people could well regret paying too much for these shares IMHO.
The drilling they have now commenced is close to the area where each of the wells do not seem to produce much oil.So even if they hit any oil it is likely that the oil flow could well be say less than 100 Bod .Also remember that the current oil price is currently 'Artifically' high as it contains a short term 'War' premium.Do not just dismiss this as their current figures have benefitted from these 'NON Maintanably High ' oil prices as this is important to a small company.
The Bio diesel is also a worry as it could drain cash flow and will obviously have start up losses presumably . These losses have to be paid for as well as the CAPEX involved. It may also be quite necesssary to issue shares at a Deep discount to re capitalise the company.
Bank finance is no good to finance Fixed Assets long term. Have a look at the Balance sheet and you will see what I mean.
Taking into account the Liquidity defecit, which I have defined and mentioned before which could well be addressed with say $5 Million + say $3 Million for the Biodiesel which means an $8 Million share issue say at $0.05 a share would mean an issue of 160 million New shares I E say 2 new shares for every one share held . Whether they could get the shares away at $0.05 cents is somewhat difficult to guess, however the company should Not rely on the Banks and if it goes ahead with this Bio Diesel , which I personally do not favour , then that will need money.Do not listen to me as I am not advising anyone , if you do not understand accounts then I would suggest that you ask someone who does and consuly your authorised financial adviser before dealing at all.
Best wishes
B2