Is a small raising needed at this point in time?What's the cost...

Is a small raising needed at this point in time?

What's the cost to KEY for the seismic processing?


At the end of the December quarter KEY had cash of $4.39m

According to the Capital Raising Presentation* released on 19/7/09 the drilling of Lidsey #2Hz was estimated at $3.5m

That leaves roughly $0.9m for administration costs and exploration/development costs for other areas, ie Tanzania & Italy.

If administration costs in the March quarter have returned to more normal levels as set out below, they would be mostly covered by the net cashflow from the UK assets until on site preparations for drilling of Lidsey #2Hz commences and for the duration of drilling.

By my back of the envelope calculations that should leave around $0.7m to $0.8m cash in the bank after allowing for the cost of Lidsey #2Hz to pay for seismic processing and any other exploration costs.


The half year ended December 2009 included administration costs of $1.4m or roughly $0.8m above the previous corresponding period. Presumably most, if not all, of this extra amount is attributable to the added costs of acquiring and bedding down the purchase of the UK assets which had a net operating cashflow of $250k for the December quarter.

The cashflow from the UK assets were adversely impacted in the December quarter by some remedial work and extreme weather conditions. So in normal conditions I would expect this to be higher by 25% or more.


* http://www.keypetroleum.com.au/reports/20090719CapitalRaisingPresentationFinalAsPrinted.pdf Slide 6