Ann: Transforming New Standard Energy , page-129

cmonaussie

NSE said on Merlinleigh anns. that "“Condon-1 will still be drilled, however this will now not take place until the second half of 2014,...Instead the company will invest approximately $13 million in first quarter 2014 into the drilling of two wells in the Eagle Ford shale."

That means they will use the existing cash for drilling the first two wells in Q1/2014.

I didn't include the cost of the other two wells will be drilled in the second half of 2014 on my table.

Then they said on the "Investor Presentation - Transforming NSE" that; "RBL (revolving reserves based lending) facility, and expect to have a facility in place for US$15-$20 million with additional future capacity up to US$50 million, to use towards the acquisition and future US well costs"

This means teh RBL facility will be used for the second two wells at the end of 2014. So it has no realtion with the operations listed on my table requires cash flow in 2014.

I also forgot to add two other payments for Cooper assets and $3m performance payment to MHR.

If you look at the cash position and expendature in 2014 again the deficit beign $16.6m.

$15m payment to Magnum Hunter
$13m drilling of two wells in Eagle Ford
$8m 3D seismic of Cooper basin
$7m drilling of Merlinleigh
$2m drilling of 3rd well in Canning (excess in exp. after JV)
$3m administration cost
$3m performance payment to MHR (in 10 months)
$1.6m for Cooper PEL570 asset.
$1m for Cooper PEL570 asset (in 10 months).
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$53.6m cash

$37m in bank now
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$16.6m Deficit

Also, I know the difference between proven, developed and undeveloped resource. You are still being rude. I have chosen to classify those Eagle Ford acreage as undeveloped even though there are wells on it, because it was shown as Undeveloped by MHR itself on their presentation. It's so simple.


invertedva

You are right "why don't they just do it now, rather than going about the pantomime of giving NSE acres and a credit line in return for cash and shares?". That would be MHR's preference. But they choose the other way around. They will eat us slowly.

Because, I don't think NSE management would supoort the takeover of company at this stage, not the shareholders.

I actually don't believe this deal is setup to go through. It would be better not to think about the takeover for now.