And taking on debt magnifies the other risks, as if things do not turn out as well as planned you still have a huge debt to pay off. Anyway, that's it.
P&L accounts and funding
And then there is the risk of companies with terrible profit and loss accounts taking on debt, which is usually required as the balance sheets are usually also not good, and the time/risk it would take to pay off that debt. Other options are to sell off the asset cheaply, which makes the whole risk reward not worth it, or to dilute away.
I think Taj is a prospect but is being marketed as much more. With talk of ~27bn, I think it is, of oil equivalent targeted and the 'jewel in the crown', that understates that their is not real data on this, anyone can make up numbers. There is the risk of not finding viable targets, the cost to drill and take the stuff out, and the timescales involved, and the admin costs. Anyone can take a large prospect and multiply it by some questionable boe/acre, does not make it so. AIM is full of people willing to take overly high risks to get rich quick. There are very few real bargains, and hence why most loose I am guessing. And it fueled by shares marketed in irresponsible ways with dodgy reports that do not highlight or sometimes even mention the true costs, and risks, e.g. the price of oil.
12 Dec '14
Good to see a rise amongst the red sea of other oily's. Let's sustain this with a nice contract next week. Gla
11 Dec '14
Thanks for the post. It's getting fairlying ugly but plenty out there for Q1. A good contract is vital to get us going... Would be reassuring to see another statement from the board since the sp has dropped 3-40% since they arrived :/
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