otto energy bhp joint venture, page-5

Latest indication from OEL on the timing for the final deal to be announced is contained in the Asia Oil Week presentation - Feb 2009 was the date given (the presentation was dated 25th Feb).

One can only think that there has been some last minute problem if OEL thought it was a done deal 3 days before the end of the month.

I believe that the last minute problem is that BHPB smells blood in the water and OEL are discovering that a "Conditional HOA" or whatever term they used is a long way from a done deal.

Most have realised by now that OEL is a "spin rich" environment. The climate has changed however and fancy accounting and over the top estimates have all but sunk this company.

Biggest worries for holders this month will be:

1) will the $US5MM shareholder loan be rolled over or will it have to be repaid at the end of the month (current repayment date).
2) where will OEL find the end of March $US1.6MM to hand over to GPC's bankers? (don't make the mistake of thinking this will be repaid out of production - all that cash is promised to repay the non-recourse loans).
3) where is the $$ (and how much) to drill in Italy and Argentina?? Both are 1st half 2009!
4) what will the write-down of the goodwill on GPC investment be?

So OEL will have to raise a bunch of $$ at the same time as writing down assets. High probability that they default on cash calls for the non-operated assets...

My advice to holders is:
BRACE BRACE BRACE - it is going to be a rough landing

p1000