@junior101 - sounds like you tasted some of your own cooking (research?) and spat it out for its foul taste. Don't fret you'll either get better or get out of the kitchen
IMO what
@gassed is saying
[between his laughs at
@junior101 for daring to bring up EBITDA (he meant well
@gassed and no need to lambast him for trying) and
@cmonaussie for daring to illustrate it is not always a good corporate measure per s]
is what is truly important at present - and whether that means an epiphany just occurred.
"FUNDING is the vital issue from now on and how this CR pans out is the first step." @gassed
Very true. And where are the sources of funds?
"how they are going to pay for any more wells and hope to hell it's not by $1.5 mill CRs" @gassed
Hope is not a strategy. Equity sale has been the ATM and has been tested in all manner of ways not just the plain old retail cap CR and placements.
BIG QUESTION TO HOLDERS & RESPONDERS - Will you be participating in this (non-underwritten) priority offer raising?
So if not by $1.5M CRs then how .... ?
Other sources of funds .... Debt - ridiculed by company and now debt free is the way to go (of course when you breach your covenants and need to sell your assets to repay your loan you tend to become debt free). Plus most posters here pronounce the virtues of being debt free (wonder if they have a mortgage, a credit card or worse still a margin loan for trading... just sayin).
Guess we can rule out debt.
Next up in the source of funds is net operating cash - not cash margin, not field level returns but corporate level net operating cash flow .... you know the money left over after paying all the bills (including G&A). A tough one that as you'll need to forecast forward ... better leave it for
@junior101 to cook up (couldn't resist) an answer. Of course, hope could be employed that it is enough to drill 3,4,5,6 or however many.
While I wouldn't rule it out it would be improbable that sufficient funds are generated.
Still leaves asset sales .... they don't appear to keen on doing that ... trying to raise funds to make a bolt on acquisition. Could sell a portion of the asset ... but AKK wishes to remain as operator so it be a minority stake. Given the location I think that is a challenge.
So I will agree with the sentiment expressed by
@gassed - where is the funding going to come from?
One thing I think any investor into AKK needs to know which you do not have a that is proper capital budget plan....
(a) specifically what wells will be drilled
(b) specifically what budget is necessary to TIL these wells (so not just the AFE)
(c) specifically what amount of that budget comes from what funding sources
(d) what assumptions (price, differential, product mix, production rate) are in that plan.
Good luck to the genuine investors.
