horizontals x 4..., page-2

Hi Diamond Joe,

Yes GGP will be ramping up their spending while the revenue also increases. Timing and size of oil sales will be critical with the desire to be self funding. I put this to SG at the AGM that the companies cash flow management was as important as their O&G expertise. SG`s reply was that `the forward potential figures were rather unbelievable when they were added up`. I think he was a bit concerned how rapid a company with a yearly $2.5 mill income was going to transform into a serious OIL company. I wasn`t worried, I knew I was attending the right AGM and not hearing GFC excuses and its effect on a reducing SP.

For all the things that can go expensively wrong In the O&G sector its gives my confidence that cash flow is probably this companies main concern. Think about that for a minute, then smile.

While I believe they will push forward as hard as physically possible this year if a cash flow issue does arrive they have the choice of delaying a well for 4 weeks to overcome it. Flow rates from the first two wells are critical to get them over the 2nd horizontal well costs WITH THE cr getting them to March/April.
Cash burn was estimated to be $45,000 a day in the December 2011 quarter.
In the Jan and March qtr they will be much higher. At least the money is being spent on a 99% chance of generating more revenue. Thats why I see this companies main issue as managing its cashflow and its growth. Have the right team for that as well. Go you GOOD THING!!