re: Ann: Appendix 5B for quarter ended 31 Dec... Okay - taking an objective look at both reports combined, and assuming no more capital raising, then next quarters cash flow should look a little like this (by their estimation.
Starting cash-flow: $4,389,000
Plus: Oil Revenue (assume same amount): $416,000
Less: Est expenditure $500,000
Less: Est Admin (same as last month): $767,000
Estimated End Cash-flow: $3,538,000
(O'all = -$851,000
Can assume same amount of petrol as assuming 2 full months production, and 1 month half production with cold onset (note October was a half month by the looks of things).
So at that rate of cash-burn we will be around 1 year away from a necessary capital raising.
By then hopefully they have a new well online in the UK, and are producing at the 500bbls a day they have said (bid words?). Looking forward on that - at say $70 per barrel = we would have annual daily income of $35,000.
Net Income using their production costs and income received giving a % of 46.2% (213/416) means net income from production of $18,830 a day, or if done every day - $1.7m per quarter.
Even if production is still half of that, then it is likely that enough cash-flow will be derived from production to cover half of the exploration cost, and all of the administration cost. If anyone disagrees with my calcs - then happy to accept alternatives.
Just a note on admin costs - I know these costs seem high, but directors, staff etc do need to be paid. They have to live somehow don't they?
Still a good buy in my books, but alot hinges on this expanding production in the UK. They do that, and successfully then their credibility returns, and we'll all be happy.
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- Ann: Appendix 5B for quarter ended 31 December 20
Ann: Appendix 5B for quarter ended 31 December 20, page-6
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