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30/04/17
12:04
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Originally posted by cmonaussie
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All,
It should be obvious that the loan obtained from ANB is merely a facility to keep them going until a full (final?) solution is found. It said as much in the announcement and now you had two well informed posters crunch some of the Qtrly numbers for you.
The devil remains in the details. Think like a capital provider. Remember only 3 sources - +ve cash flow from operations (nope), equity investors (seemingly have given up) and debt (who get first claim on cash flows and assets ahead of remaining equity investors).
Look back on 3 things AKK have provided you with:
a. HY audited report - only need to look at the balance sheet and then just look at the value for developed and evaluation properties. Prior the any loans, AKK's balance sheet is simple: CSE = NOA. Now as you read note 3 and look at what was capitalized, rationalize that with activities of June - Dec 2016. Is this an asset that you would accept as collateral?
b. Look at the Reserves Report. Look at how those (volume numbers) are constructed. Now look at the valuation. Ignore NPV 0%. In fact you could ignore NPV 10% as well. AKK WACC is and will be far above that number. This will further reduce $ value. Now ask yourself, how much capital is really necessary per well to D&C TIL the well. Does that reconcile with their investor presentation.
c. Investor presentation - economics.
A lender is going to look very very closely at them. If half of what AKK say is true, then what they need is a drilling partner you will drill to earn a working interest (and if the partner is smart .... they will make sure they recoup their capital i.e. well payback BEFORE sharing any profit with AKK ... sound familiar?). How does this advance your shareholder equity value.
That's what you ought to be looking at if you believe in the long term success, IMHO
Good luck
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Cmon
For AKK management it's simple . Kick the can as far down the road as you can, and collect the salaries and director fees/ associated party fees for as long as you can .
The name change is to tap another group of naive equity funders. Would not be surprised if they change brokers to go to a new pool of investors ( I use the term loosely )