while gas prices are much lower, the 90 BOE/d that comes from gas is about 540 mcf/d, much of it is rich gas we net over $4 per mcf so that is over $2,000 per day, $60,000 per month, $720,000 per year you are ignoring.
What you conveniently forget to mention is that oil production is actually 97.6 barrels a day. The rest is from gas which is worth very little. This recent revelation was a big disappointment as most people expected to have a much higher ratio of oil to gas.
Northcote currenly produces 190 boepd at the moment which is set to increase in very short order,and will continue to increase. If i was a betting man i would say that by the end of November Northcote will be over 300 per day and profitable. Lets see whos right.
The $10 production payment for Shoats Creek does indeed have to paid, the oil at shoats creek demands a higher premium which was $12 per barrel which offset the payment but i have no idea what that may be now oil has slid a little.
August 26, after the mid year books were closed, Northcote announced receipt of $175,000 in cash: TO NORTHCOTE from the farm down on Shoats Creek
If you go back to the May 9 announcement about Shoats Creek, it discloses that Springer Oil & Gas is paying $450,000 of the first $600,000 of cost out at Shoats Creek
Also, Northcote got paid $100,000 cash in the second half from MX Oil as part of the deal, it was not in the RNS, that is direct from the company.
In total Northcote freed up an extra $275,000 cash from the companies deal making skills, plus got Springer to pay for 75% of the initial $600,000 at Shoats which is a carry for both Northcote and NAP.
Combined with the amount Northcote can invoice out to Springer and NAP from first half deal related costs, they recovered about another $100,000 cash as well.
And going forward invoicing about $30,000 per month to the non-operated partners.
It sounds to me like you are being fobbed off again by Randy. Other's have made that mistake before, but have learned their lesson. Don't always trust what directors say whatever happens they will of course ramp their own company. Also don't forget about the $10 production payment from Shoats Creek to Aminex, that is going to hurt at the current oil price.
A lot of the overheads in the first half was due to the work that had been ongoing related to Shoats Creek as the deal had not closed, so Northcote had to absorb 100% of the costs and did not have its non-operated partners Springer and North American Petroleum in place at that time, because the deal had not closed, so they could not bill their share of expenses to Springer and North American Petroleum
With the deal closed in the second half I would expect Northcote to invoice a significant amount of deal related costs from 1H out for payment and also, based on my estimate of operating costs at Shoats Creek, I suspect that probably at least US$25k/$30k of Northcote costs are now paid by the partners.
Also, note that overhead cuts were made in the 1H which is another $20,000 per month Northcote did not have until 2H.
The sucess at Shoats Creek already shown will increase as we move forward, Northcote are the operator and as such have a lower cost base and the low cost of work overs and recompletions means cash burn is much less than you think or you think is shown in the accounts but is not the full story.
If you ask the company questions instead of posting doom and gloom and stop trying to put fear into shareholders you would understand that Northcote is in a much better position than you think.
Admin costs have actually decreased, springer and NAP will be paying most of Shoats Creek, these workovers cost around 38k so hardly a massive cost and Springer and NAP will be paying most of that for now.
2H is going to be much better than 1H, and as for comment: the plunge in oil price could wipe them out, that says everything about your previous comments. You have no idea.
Get real, the plunge in oil price could wipe them out. I think you are in love with this stock.
I don't have an agenda I just call it as it is. I was bullish in the past with the higher oil prices and Randy's bold predictions but the company has totally underperformed and is likely to be in dire financial straits exacerbated by the plunge in oil prices. They have also recently increased their admin costs which could prove disastrous.
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