RRDS was sold to LO to enable LO to have exclusive right to all revenue generation. If you check the accounts in detail you will see that the loan to LO to complete the purchase was settled via offsetting debt to LO to keep the debt of the balance sheet , an independent Bod would not have done it the way , this was done at share holders expense
Nighthawk in grave danger, PMO still looking over their shoulder a bit, LGO facing placements and dilution to stay afloat. The list is endless. RRL not in precarious state they were, so celebrate that fact while we wait with bated breath for ops news.
Ten mentions of LO and not one mention off RRL in one posting, well I for one believe that RRL is now looking better than it has for a long time. The RRL BOD and the RRL management team have shown that they are focused and motivated in making our waterflood enhanced oil recovery a reality (first output due in the second half of 2016). They have also showed that cash burn has been dramatically reduced, not least by selling off RRL's old rigs to RRDSL which has given us access to 4 brand new rigs to drill with. Test results still to come on MD 250 which should also underpin production growth for RRL. The future for RRL is looking bright IMHO.
Land Ocean announced Chairman’s pledged shares. of a similar amount to initially Core and then Sibo. This is documented.
Pledged shares is a fairly common way of raising funds in China and indeed when the Chinese stock market was suspended recently, share pledge share rules where relaxed to enable funds to be raised without shares being issued at a very low price.
Pledged shares means he will recover the Land Ocean shares when he repays the money that has been raised using the shares as security. It is in his interest to ensure that Land Ocean increases its’ MCap.
He will want RRL to do well, so that he can maximise his Land Ocean shares.
As controller he does it by having control over what happens, maximising LO’s revenue. He will ensure that LO’s credit can always be repaid and seek to take as much revenue as he can for LO, leaving nothing in the company for investors.
As you showed, the monies have been carefully balanced, just enough flow to repay the credit terms and cover overheads.
Sino would be the insurance policy for the money from LO, but by bringing the water flood revenues first and then drilling this insurance will not be needed.
Remember the $450M work forecast for LO ? Remember the $50M PO for undefined work, LO needed tat for governance
If The chairman of LO is an investor in SIBO then it is in his best interest to ensure RRL do well and for them to get credit facilities on good terms. So it is rather something LO shareholders would be interested in rather than RRL shareholders since it could be construed as a conflict of interest.
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