Err...its not quite that simple swingy. For starters you haven't factored in the decline curve, which we are told will be less than 20%. However the business model is good & the patient will be rewarded here regardless of what the bashers (traders, shorters & the altruistic people who use their time to post on here to save investors losing money. Lol) say. All imo of course;-)
Dougie, With 8 wells c $240k/month profit.... continued expansion becomes self funding at approx 7 wells per annum. After 3 years when original 750k loan repaid and rest self funded we have possibility of 22 wells Or 1.1million per month profit. Does that look right?
Guessing that if Lind excercise their $750k loan, then we could utilise It for next 2 wells ? $375k each...25% discount...almost ? Rough calc's for Lind excercising their option, is the $750k would be c.$39k/ monthly repayments (calcs derived using initial funding arrangements) or c.$20k/month each well drill costs (spread over 24 months)
$750k.. Maybe 2 wells at 50bopd each, could then bring in c.100bopd 39API getting close to Crude pricing? So, 100bopd x$50/b (top end) c.$150k/ month before taxes/royalties, & after, leaves c.$100k/month, Less the $39k/month leaves LGO with c.$60k/month, or $30k/month profit each well...
2017 & hopefully 8 wells, if again bringing in 50bopd ea., an extra 400bopd (new totals of 900bopd) 8 wells at a rough calc of $30k profit on each, giving c.$240k/month, so room to move forward. 8 wells, c.400bopd, at $50/b (ok, is top top end) giving c.$600k/month, added to the sp.
Targets? 1) 1000bopd at $50/b, $1.5M/month, or $18M/year, & suddenly that 22p seems plausible, & 2) self funding for moving forward, and again looks plausible...
Or.... Has there been insufficient caffeine this morning ?
dougal66 - weren't you the one who helpfully suggested we were another AFREN when we were going through a period of uncertainty but ' forgot ' a vast chunk of cash being held on deposit under terms of BNP loan in working out our viability!
dougal66 - I'm glad as a result of my answer to your innocent question you've now been able to take on research with such gusto without further hand holding - not sure why you think it's worth cut and paste as it's been well ventilated on here and shareholders are aware of the ramifications - I don't think anyone is trumpeting the terms of the loan as deal of the century but it got LGO on to a sustainable financial footing so that scumbag bashers weren't able to claim there would be a Placing every 5 minutes just to make the BNP repayment!
Lind will be granted options by end April. Note "options"
"The Funding Agreement with Lind includes provisions to grant options to Lind to subscribe for ordinary shares in the Company and allow the conversion of the balance of the facility to equity at a fixed price of 0.15 pence per share. At the date when the Funding Agreement was put in place, LGO was not in a position to issue all the shares required without further shareholder approval. Therefore it was agreed between the Company and Lind to defer the issue of a portion of the options granted and also limit the conversion rights of the facility until such time as LGO, through a General Meeting, could complete its contractual obligations to issue shares under the Funding Agreement with the approval of shareholders. To comply with the terms of the Funding Agreement, options for a further 83.26 million ordinary shares are required to be granted in the first quarter of 2017 (based on the Company's current issued share capital) and shareholder authorities maintained to cover the possible conversion of the balance of the facility, which requires approximately 1,097 million shares. The shareholder authorities sought at the General Meeting includes these obligations"
As for further finance, Lind can at their discretion enforce another $750k to Lgo , they have options for 23.9 million shares at 3p (£717k ), and could reduce monthly repayments by converting part or all of loan to shares at 3p , also plenty of headroom in debt facility be mutual agreement.
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