Borrowings increased to $18.3mil which was way more than most of us estimated.
I expect they will knock a lot of that debt on the head in the next 6 mths however the depletion of reserves must also factor into the valuation equation.
Situation remains that a lot of eggs remain in the Worrior basket and STU must keep drilling in the CB to maintain reserves replacement.
I doubt STU will be able to fund Bazzard ($20mil) and drill CB wells and pay off the $18m debt all from the next 6 mths cashflow. Thats not a major problem in itself and the sp should still appreciate somewhat as Bazzard gets closer.
If you look at Apaches drilling schedule (estimated 305 days to complete) , Wasabi has only just spudded so Bazzard probably wont spud until year end rather than 3rd qtr 2008.
Phase one of the refinery project is estimated to cost $45mil (STU 50%) so funding for that project will be an issue in the near future.
Might stay on the sidelines for a while now and look at STU later this year as the big drill gets closer.
STU Price at posting:
0.0¢ Sentiment: Hold Disclosure: Not Held
