SilentPartnr that is excellent research. But let's move forward using your facts and see what we can extract.
First, by my math, if AWE can renegotiate from $4/GJ to $6/GJ, they have an additional $36M in earnings (assuming no added expenses). If they can get the market-trend price of $7/GJ, that is $54M in additional earnings. When are they likely to complete the negotiation for 2018 pricing? The reason I care is that announcing that to the market puts them into a position to finance WA phase 2 on much stronger terms.
Assuming only $36M more in earnings, is this enough to offset losses from oil, and would that cash flow allow them to pay off bank debt to finance the new plant / gas expansion in Western Australia?
This is the case where leverage looks appropriate to me, because we are financing capex for a known resource to move it to cash-generating production. To raise that money with the current stock price from equity looks like a mistake to me.
What amounts do we need to finance for the new gas plant, and what is the annual interest payment on that for a typical WA commercial loan? Let's fill in details.
