Ann: Raising up to $US17.5m to fast track Snake R, page-16

re: Ann: Raising up to $US17.5m to fast track... Akap,

I think there will be an RBL in addition to the equity raising. The announcement was odd in terms of both timing and wording.

In August they were still banging on about a RBL. 2 months later they issue preference shares (out of the blue) and agree to use the proceeds to extinguish the Convertible notes which aren't due for another 9 months. They then announce this publicly. This does not strike me as usual behaviour.

My assumption is that they did this to meet the terms of the intended RBL facility. The remainder of the equity then used to contract rigs for 2014. Once the decks are clear, they can then sign up for the RBL.

Worst case scenario, the $10m will fund a second rig. Best case scenario, RBL will additionally fund a 3rd rig + lease aquisitions.

Assuming rigs come on line in January and there is 3 months between spud and sales, AOK will see the fruits of this from Easter next year.