My take on cash flow:If you look at other oil companies, they...

My take on cash flow:

If you look at other oil companies, they tend to try and increase reserves at an optimal rate and obtain base cash facility of ~30% of proven reserves.

RFE have a $100M cash facility with a current base of $45M, which is about 23% of current proven reserves of $196M (as at June 30, 2013). So you might think that the borrowing base could be taken to $60M based on mid year reserves.

In the meantime RFE have been aggressively drilling wells ahead of schedule (which has put the wind up some of us from a cash flow perspective). If RFE achieve a reserve upgrade of $250M - $275M by end of this year, I gather the borrowing base could be increased to about $80M - $90M.

Based on this, my cash flow analysis reveals that RFE might not need to revisit funding until Q2 CY 2014, and by then I estimate proven reserves will be increased to >$320M based on scheduled drill program.

The cycle continues until we are cash flow positive. For what its worth, and all things being equal, my projection is that RFE will be cash flow neutral in 2H CY2016 and required funding base at that time will be around $200M. (AUT has $300M funding base).