I get what you are saying but the fact that we are borrowing on our current and projected production figures means that we need to ensure that we can cover the re-payments. If not, then the whole house of cards collapses.
Pay-back is incredibly important as it implies that we receive more cash than we spent on the asset.
Take CT16 for example: if we spend $830k on the asset which at the start of production produces 300bpd, then we can borrow a fair bit using it as collateral. However, if the asset's production plunges to 30bpd, and we only recover 50% of the cost of the well in revenue, then we get screwed two ways, by the bank and by the asset.
MAGP was/is a sad story, investors got burnt. But we cannot praise ML for being secretive about the asset's potential to protect investors, then moan that the SP is floundering at a low level. I mean, as an oil and gas man myself, I find it very un-nerving that NTOG cannot issue an estimated reserves report, making valuing the company is a bit difficult.
I wonder if we will get the quarterly report by the end of the week...
I wouldn't be expecting CEO/COO to be sitting on their back sides waiting for payback or wells to come on line.
CEO has the backing/funds to do more deals and not just wait for CT/HP to come good. This period in a year is when most of the deals/talks are done or are started getting ready for Q4. So IMHO we are in the position (personally I would have liked to be around 200bopd) to move quickly on to other things/areas. Its a waiting game to get all the parts of the jigsaw into place.
Reaching payback is not the only consideration. Yes NTOG would like to reach payback asap but the main concern would be the wells don't run dry so to speak. As long as they are producing they are earning and its a revenue stream which backs (proves up) reserves. Here now is the key as the well(s) assets are not a loss but something we can sell with the potential of reworking just like we did on CT3. Bloom is a asset but payback may never be reached but as asset to raise funds against by hocking or selling it is a goer.
As for "BOD only want to show enough to keep investors interested" ........Most companies do that but in our case sometimes its not our BOD putting a restriction on news/info. You wouldn't want to do a MAGP on new releases without being able to back it up 9 months down the line. As the headline news at the start was so great that it gets all investors going. However look deeper or learn to understand what you have invested into as the news stops flowing and then you find that the news wasnt as great as 1st made out.
I agree... I wonder if ML will announce when each well has achieved pay-back? probably not, but it would be interesting to see... I mean, if none of them have yet, we haven't really made any money yet :/ ....
I guess this is the problem with investing in small producers / cash boxes, investors want all the information where as the BoD only want to show enough to keep investors interested....
I see Kingfisher (for Hinkle) hit a b-e-a-uty recently:
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