oct 2007 oppies

Considering the drama about oppies expiring worthless, I thought I would spend some time seeing exactly where the register is now and is likely to head.

Lets face it, there are 7 months left and there has to be some anxiety about the Oct 2007 oppies. Im confident myself ( with my risk profile ), but thats after exploring the risks involved.

Im making some assumptions :

# Cap raising is as mensioned in Sept....3 cents ( 2.4 cents )

# Free 2010 oppies in Cap raising

# 4 wells will be drilled

Shares :

Shares now on issue 1,791,510,000
Acquisition of 49.9% 600,000,000
$20M Cap Raising 1,041,666,000

Total ( without 4 wells ) 3,433,176,000

Acquisition 49.9% 2nd 900,000,000

Total ( with 4 wells ) : 4,333,176,000


Options :

Options now on issue 1,383,709,000
Acquisition 49.9% 525,000,000
$20M Cap Raising 1,041,666,000

Total ( without 4 wells ) 2,950,375,000

Acquisition 49.9% 2nd 225,000,000

Total ( with 4 wells ) : 3,175,375,000

Total Shares + Options : 6,383,551,000

# If we count the 900 mill shares + 225 mill oppies we arrive at approx 7.5 Bill fully diluted. But thats after 4 wells...so really imo these Consort shares/oppies are irrelevent at present. If 4 wells are drilled its likely the oil found will make the dilution no concern.

So, fully diluted.... 6,383,551,000 shares, and after consolidation, we :

End up with 319 mill shares. ( WNL 317 mill shares )

Now, regarding the Oct 2007 oppies :

Presently on issue : 1,383,709,000

Post consolidation : 69,185,000

Some people are at present hissing about the number of oppies...fair enough, but post consol thats irrelevent.

OK they will be $1 oppies, but the " billions...penny stock " argument will be finished.

Conspiracy theories around say RRS want the Oct 2007 oppies to expire worthless.

It would be the go from a financial perspective imo because effectively the oppies are a placement at 5 cents, however when on AIM RRS would likely do a placement for the same cash at 40 cents ( without the same dilution ).

But now we get back into the real world :

69,185,000 Oct 2007 oppies is about 21% of the fully diluted capital (319 mill shares).

Dont forget that the 319 mill shares includes the 1,566,666,000 2010 oppies...post consol equals 78,333,000 oppies.

So really, the Oct 2007 oppies are not the hassle some may think.

Peanuts and not worth RRS directors stressing over, especially considering the cashflow it could provide in the coming months once JV/AIM has occurred.

CXM/PL Govt are anxious to move drilling along.
The Oct 2007 oppies mean nothing to CXM/PL Govt.

Are they going to postpone any positive announcements for the next 7 months so RRS can have worthless Oct 2007 oppies ?...NO

Are they going to postpone any drilling announcements ?...NO

The only way I can see the Oct 2007 oppies expiring worthless are :

# A plane load of RRS directors falls out of the sky ( Fly safely boys )

# Civil unrest occurs bigtime

# POO collapses to US$30

# AIM list is delayed till Oct.

Why would AIM be delayed till Oct ?...

Sure it would not effect CXM or PL Govt and the Oct 2007 oppies would expire worthless...

Or would they ?... Consolidation would still take place and CXM would still press on making announcements.
Insto's overseas would seize the opportunity to invest in poor old ASX bound RRS. CXM would lead the way rather than AIM in that circumstance.

Would RAB/FB and other present investors be happy about that deliberate ploy to obliterate the Oct 2007 oppies, and hence hold the share price well under 10 cents ?

No...they want to impress the bottom line for their investors...they want action while there is a window of opportunity.....DRILLING

Remember, RAB imposes strict conditions on its investments...RRS would have a timeline in which to AIM list....RAB's home turf.

21% dilution for the Oct 2007 oppies is the least of the worries for RAB etc.
They have done their homework bigtime.

So, can we leave the "conspiracy" ideas behind regarding the Oct 2007 oppies... .

It doesnt make any sense from any angle.

RRS directors are imo doing a fine job in hindsight considering the huge obstacles.

The "delays" are unfortunate but, I dont believe any explainations other than the obvious international/geopolitical/corporate etc.

I can just see it....soon some may be saying :

"WOW...that RRS has only 70 mill oppies and potential 60 billion barrels of oil...and that lead/zinc deposit is a bonus...and did you know WNL is landlocked and has potential of only 6 billion barrels plus the civil unrest in Sth Sudan and is still valued at A$1 Bill ? "

Bring on JV/AIM...and hopefully a drilling program announced to commence prior to Oct.

Feel free to haggle with figures etc...