So what target have we missed then, please explain because as I see it there is nothing in this RNS re missed targets just the BOD identifying a possible subject to shareholder votes), new business opportunity that will generate revenue and cut our production costs. The 4 brand new rigs become ours too
Interesting to see the same names talk this down, it makes sound business sense to me. You complain when we pay LO for drilling services and now you complain when we try and, not only take back control of the drilling operation but also give ourselves a whole other revenue generating business with 4 brand new rigs, one of which has already been leased out I believe.
BM, you seem objective enough to see the flaws of this rather than the blind ramping of some LTHs. Credits to you.
As I have said in the past, the biggest reason to avoid this company is the fact that LO runs Range management and also owns RRDSL. They sold RRDSL to themselves in 2015, now barely 2 years later, sells it back to Range again. What is the point of that? It is possible that LO is now cash strapped and doesn't want to fund RRDSL anymore.
One upside of this transaction though is that there is no potential conflict of interest now so it makes this more investable. However, as you have pointed out, this now owes over 55m to LO. It will also now have to fund the drilling costs and waterflood out of cash pile and cash flow which was still negative (if you factor in RRDSL fees).
$55m at 7-8% pa is around $4m a year. So $67m to repay in 3 years' time? 2017 will not hit target and one can only assume that 2018 and 2019 will be considerably behind as well. I really don't think Range is in a position to repay that so what next? The obvious would be capital raising on the market. Looks like more dilution coming.
I really can't see why some LTHs still stick more an more money into this when there are so many other better candidates around with straightforward management structure and finance. Some of them purport to be financial expert bla bla.
At least the quarterly cashflow statements will be more transparent.
Yes - such a roller coaster share (actually a roller coaster goes up and down - so the analogy is not correct. Any thoughts and they will only be thoughts at this stage about what is likely to happen - and time frames too e.g. how long suspended???
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