Hi, sorry for the delay. I have never worked in the City as an investment (securities) analyst, but I do have some relevant qualifications (including an accounting one, even if I didn't express myself correctly in one previous post - although the subsequent wording to the offending bit made it clear I understood the difference between cash costs and accounting costs), and of course if I had to sit the exams again, I doubt I could pass. We worked with SSAPs instead of International Financial Reporting Standards, and no they were not called cash flow statements in those days (Statements of Funds Flow and Application of something or other).
Sorry for the delayed reply. I haven't worked through all the figures you supply, but I take it on trust they are correct. There are a few errors I made (I estimated the debt level changes between 2012 and 2013 as being about $10m and assumed the next year's debt level would be about 20% higher (because of new debt being issued to pay interest on the debt). In fact the debt change was about $8.6m. Also I didn't look to see if any of that financed an increase in cash (a point you made). And of course as another poster pointed out we won't be spending $1.4m again on laying another gas pipe (although I wouldn't mind if we did if it is going to double the revenue stream from gas sales to $12m p.a.). You seem to be happy that we don't have a liquidity problem (concerned with cash) whereas I am more concerned we have a proven business model that is sustainable from a profit point of view (concerned with accounting costs as well). Without success at the higher hurdle, I fail to see how we have any negotiating strength (or indeed a share price above $0.25 by August 2016) with the debt holders. I suffered from the last restructuring when we got hit with the $100m inducement charge (a retrospective finance penalty for failing to deliver strong profitability: a sort of "we shouldn't have charged you such a low coupon on the debt, so we want extra now to make up for that" type of charge, and of course it is represented by the difference between the old conversion price and the newly negotiated lower conversion price multiplied perhaps by the number of shares involved that were converted into at the new lower conversion price. As far as I am concerned the whole business of extracting oil an gas is almost completely insignificant in terms of costs and revenues when it comes to the amounts that can be lost in finance charges such as the last inducement charge. Being able to meet bills as the fall due (your concern? something I am not concerned about because I know all Mr Nicandros has to do is issue more shares or more debt to our detriment) has nothing to do with being able to fend off these huge financial penalties that come out of the blue if we don't have a sound business model that gives us a rationale to exist. So I will always be concerned we cover depreciation charges even if the actual cash cost of the depreciation isn't born until many years later. On the actual weekly increase in debt, it may not be quite as high as $250,000 a week but that is the sort of level we ought to be adding value at to make sure we are not going to end up in Chapter 11 style proceedings giving up our shares to the debt holders. I do think it matters whether Mr Nicandros is buying shares or debt in us, as it is indicator of which he thinks is a better bet. He does not have to publish how much debt he has bought until the next set of audited accounts, by which time the information will be useless. Word limit finished.
I've got a very good feeling in my waters.........and it's got nothing to do with the odd cold amber or three as I'm in work nights again :( Could indeed be a Coggy FFRrrrrrriday given today's trading late afternoon? Very kind words from tsbs early today, cheers dude :) Catch everyone later. Theprodigy, cracking show being put on by your country up there in Glasgow - nice :) ATVB. VW
For the gas, there are two options to get big volumes of gas to market:
1) Somebody (GOGC, not FRR as it's too big a job) builds a gas processing plant in Georgia, with all the related facilities (but on a big scale) in order to export "in spec" gas into the trans Georgian pipeline, for sale into Europe.
2) Somebody, possibly FRR, lays pipes from all their well heads to an existing gas processing plant, in neighbouring Azerbaijan, for processing, boosting in pressure and exporting into the pipeline for Europe.
Option 2 would be the cheapest. However, I doubt FRR will want to do this, as it is not in their business model i.e. becoming a large scale operator.
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