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re: agip funding - for trender2 trender2

good point about the bank feeling secure enough over the value of the acreage to lend HDR $31M US.

do you know what term the $31M loan has though? I was under the impression it was more of a bridge than a long term loan, and that HDR will sometime this year either have to raise equity or long term financing to pay it down. Obviously if they could on-sell (say) 1/3 of the ENI acreage for same price as they bought the whole lot for, pay off the loan, and get the remaining 2/3 for free that would be attractive. Alternatively they could just raise $31M US via an equity issue, but that doesn't cover any of the drilling costs, so throw those in and you're talking a very substantial equity raising.

As for keeping the $31M debt in place and project financing Chinguetti as well - who would get first-ranking security? Surely the project financiers. In that case would the ANZ be happy with second-ranking security? I really doubt that.

My conclusion is that HDR will have to on-sell enough of the ENI acreage to pay down most of the $31M loan because that plus drilling costs would be too much to raise via a share issue, and it wouldn't be viable to keep the $31M debt in place AND project finance Chinguetti as well.

The question is how much more (per %age point) can they on-sell the ENI acreage for compared to what they paid for it? That will probably determine how much they get to keep.