Looking at PAPL (the company LRL purchased for a few million dollars and some shares in order to get this Chinese Tight Gas license)......
If PAPL does have a high cash burn, as it seems from their financials released by LRL at completion of takeover then you can perhaps see why LRL want to get some flow, any commercial flow possible, no matter how small the reserve may be from these pilot test wells - to plug the hole and generate some income to stop these PAPL losses.
Six months to June 2012 PAPL I think they burned 791K US$ - and that was with no drilling AFAIK in 2012........
Extrapolated thats nearly a million pounds a year losses - announcement link below plus extract.
...............As at 30 June 2012, PAPL had net assets of US$120k, carried forward losses of US$9,889k and, for the six months ended 30 June 2012, reported no turnover and a loss of US$791k................
LRL Price at posting:
28.5¢ Sentiment: None Disclosure: Not Held
