Hey VH, I am trying to improve my balance sheet and cashflow...

Hey VH, I am trying to improve my balance sheet and cashflow analysis and ELK is giving me a run for my money! I am hopeful that if/when Brad and his crew are able to refinance everything, the picture will become much clearly, but even then, when this occurs, I just have to wonder, what sort of covenants, exit fees etc are attached to the main facility? How will this be paid for, when the loan expansion you mentions was done on the premise that it was to pay for the extra work they plan for Anneth to increase production etc, not for 1 off payments.

Also agree with you about the preferential equity, although if Brad can, will be wipe the slate clean with the new debt?

@danpech - They do indeed have some cash, as you and VH mention, but I am wondering whether they even have the ability to utilize all of it, considering the size of the debt facility, i.e, perhaps US $10m needs to be kept as a minimum requirement? Then, we know they are doing the deeper wells on Anneth, and Grieve is currently making zero profit, so... the question is, does Annets current production earn more than what they are spending on capex and more importantly interest repayments. It is so hard to see exactly when ELK might be in a position to not keep tapping the markets, although if Grieve was indeed producing 1100bopd or more, that might change things.

Thanks for your first hand insight from the AGMs. That matches my own view/guess on how things have progressed. Usually Brad is quite savvy on managing news flow and expectations, which is why I doubted new version of the 'history' of Grieve. Grieve was supposed to be the cash kicker they needed right now, to ensure they don't keep taping the markets.

I don't think you are naive at all. The upside for ELK is substantial, but... at least for me, I have found an oiler with less downside and more upside in the nearer term. If the oil price stays high, then ELK will be ok, albeit perhaps with one more raising? Something which annoys me a little is just how strongly Brad believes the company should be worth more just because its cheaper than its peers. That is not enough of a reason on its own. ELK needs to get runs on the board, and that takes time, although in saying that, they have had Anneth for 10 months now, yet more raising and no cash build to date. Hmm.. I am going round in circles.

I wonder if they are re-hedging lots of oil at current prices? Personally, I would be, at US $70 a barrel, Anneth will rake in the cash considering it has like 25 years of production ahead of it. That alone would reassure me a little, but I will keep watching.

Good luck though, the last time I watched it this closely, if had its big move. Ha.