Ann: Raising up to $US17.5m to fast track Snake R, page-11

re: Ann: Raising up to $US17.5m to fast track... Regarding the terms of funding, as I understand it Ptolemy gives AOK 15c per pref share which can be converted back to a normal share after 48 months. I assume the conversion can only hppen if the normal share price is above 15c. So effectively that is 3c interest per share after 2 yrs. On the other hand, they could have done the standard equity raise at a 20c discount to the weighted average but that would have knocked back the entire register by 3c.

Its not great, but its not bad either. They have raised equity rather than debt and they have done it in a way that does not cause the SP to drop.

I would realy like to know if
a) this is in addition to the RBL, or
b) this is instead of their RBL

If there is a subsequent RBL, that could be very big news re: acceleration and lease expansion. My gut feel with this funding announcement is that there are contracts to be signed and AOK could not wait to finalise a RBL. 2014 drill rig contracts perhaps. Or leases to sign. Or perhaps they had to clear the convertible notes as a condition of their RBL.

Given Convertible notes at $7.5m, this is a net increase of $10m in funding. That is enough to run a second rig for a year (with current production funding the 1st rig). In order to go for 3 rigs and more acres, I would imagine they need an extra $20m RBL facility.