Soon GRK will need to fund a suitable rig to drill the first full size well. If they observed the lessons from the Habanero wells, they will commission a rig suitable to drill wells that can also double as production wells for an initial demonstration plant.
How will GRK finance this?
Such funding would blow the market cap out by a figure somewhere above 200%, as, using quite rough figures, each well will cost $4-6 million (conservatively), and then there will be a $15-30 million price tag for the demonstration plant. Ongoing operational costs can also be attached to these estimates.
It is likely GRK will be able to access government funding to cover some of the costs, but the majority of the bill may have to be covered by the company.
If dilution is to be in the region of 100-200%, there will no doubt be institutional placements, but it would be good to see shareholders being offered a pro-rata deal, preferably on a 1:1 ratio, with the funding shortfall filled with an insto placement (perhaps BHP will take a stake). I look forward to seeing the provisions for the option holders, and hope we will not be left out.
All of this is assuming a suitable rig can be found, as there are large lead times, which will only grow longer.
Does anyone have a more refined figure for ongoing capex and opex?
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