jka what does the future hold, page-6

No need to do a cap raising just yet, do your own cashflow to check.

I've done mine, and my broad calcs are below.

Cash at end Q1 = $8.7m

They had spent $4.2m of the HW3 well cost, the presentation stated a cost of $8m or $27m gross, but the last quarterly stated $5m still to be spent which meant $9.2m well cost or gross $31m. I've even added additional contingency on top of this to total still to be paid of $6.6m or gross cost of $36.5m.

Admin csts are only $0.25m / quarter so even with cost overuns, they will still have plenty of cash for the time being.

I've run my cashflow out to 2016 and if JKA do what they have suggested (Aje EPS) then they will not need a great deal of cash, maybe a $5-7.5m capital raising (listing on AIM maybe).

I have assumed that the suspended well and the final well at Aje would be completed in Q4 and into Q1 2014 with first production in Q2 2014. Cost to JKA would be around $2.5m (gross cost of $50m). I would assume that the full development of Aje would cost JKA around $16m (gross cost $320m - 8 addtl producers at $40m a piece) and this could be funded by an RBL facility. If and when this is completed, JKA will be producing plenty of cash to progress developments.

Obviously currently this is all about HW3, but its good not to take your eye off cashflow and future developments on Aje etc.