Hi team (I say team because agree or disagree or like it or not, as a SH you are part of team EGO), I thought I might try & change the discussion & want to know what idea's you might have on the best way forward to tackle the future with the debt & drilling.
Personally, I would like to see one final CR/debt mix. My thoughts are that we need capital injection of around 50 mil to repay the debt & plan 2 - 3 drills immediately. To take on a partner at these low levels will surely dilute us all.
I wonder if we can do a cap raise for 10 mil & do a 40 mil convertible 3 year note paying a quarterly interest rate of say 10% or slightly higher (due to the risk of the loan). That would attract a yearly interest bill of at least 4 mil which should be easily achievable. This would give us 2 - 3 years to tie in further discoveries or increase the lifespan of the production facility at RG. If the current well issues are resolved or one of those 3 drills has success then the de-risking of the loan should also have KPI's on the interest i.e. interest rate will reduce to 8 - 9 % by increasing reserves to RG by 2-3 years & less for more. Perhaps even a clause from the beginning that after the 3 year period they can be paid back or rolled over into a second & third 3 year period or convertible note 2 & 3 based on what the company feels is the best action at the time. Hopefully it will not even come to that as we will have some big players knocking our door down by then to jump into the largest landholding onshore Perth Basin & hopefully we will be holding the Aces by then to negotiate the best possible scenario for shareholders. I would like to see a few board changes in this mix as part of the plan & see some O & G experienced guys on board.
With interest rates at all time lows I would certainly be looking for better opportunities to park some money rather than getting sweet stuff all from bank interest & would certainly participate having confidence in at least one of those drills being a success (especially Lockyer).
Just an idea, I'm sure I will come up with something else but just throwing something out there...............Anyone else?
EGO Price at posting:
32.0¢ Sentiment: Hold Disclosure: Held
