now opening club sugarkane, page-9

Applying Kennedy flows to guestimates of completed lateral lengths for the new wells and assuming success in Weston and salvage of at least 1,500 ft of Kowalik (a lot of assumptions), gross attributable cash flow would be in the order of USD100k per day. Net, after roylaties and a notional tax charge would be about $50k per day (whilst ADI is ploughing the cash into investment, tax might not be a real issue).

If you assume (another assumption) $7m for drilling & completion, that cash flow would fund ADI's contribution to drilling costs at the rate of 1 new well each fortnight, with escalating cash inflow as the next stage of drilling becomes completed. Assuming the same cost of drilling, and ADI's cash reserve would finance[6] wells.

Unless I have the costs and other figures totally wrong, I cannot see ADI requiring any further capital if (as ADI management suggested) results for the rest of the free-carry are rateable to the Kennedy result. Further, ADI has the other Yemen block in hand to realise further cash.

It's all based on assumptions but we do have a bit more comfort from Hilcorp's enthusiasm and it is paying the bills at the moment.

The news release in the UK (Empyrean) was reported in The Times "Tiddlers to watch". They must have been short of things to report or........

After 4 years Sugarloaf might actually produce some honey.