this was in the accounts for may 2014 3. GOING CONCERN For the year ended 31 May 2014 The Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements particularly as the Income Statement reports that the Group incurred a loss of $1.7 million for the year ended 31 May 2014 (2013: $15.9 million) and the Consolidated Balance Sheet shows that the Group had net current assets of $8.1 million at the year-end date (2013: $1.7 million net liabilities). Net current assets includes the receivable from RSM of $8.6 million (refer Note 20) and current borrowings of $4.4 million relating to the Noor Petroleum loan and $5.0 million relating to the BGFI loan (refer Note 23), all of which remain outstanding as at the date of this report. At 31 May 2014, the Group had $17.0 million of cash (2013: $13.1 million). At 21 October 2014, the Group had cash of $8.5 million. Based on their forecasts, the Directors expect that if the Group were to terminate its exploration and development programme, the Group would generate enough revenue to fund its base operations for the 12 month period from the date of approval of these financial statements.
Mr Dots, the current wells are being slowly depleted so Vog will need to drill new wells eventually, however not for a good while. I read somewhere that Vog only intend to drill new wells once scuffs are over 10mmscf/d. I do not think the two power plants will overly tax the current infrastructure, however if Dibamba is to be supplied in a year or so then more voulume will be required. A nice problem to have !!
That sounds about right Mr Jim, breakevens. However Vog are looking very healthy cash wise looking at the accounts & Grims cash. Connecting up the power plants in a month or three, depending on how quickly Altaaqa can clear the generators through customs, should boost Vog into the profit zone!!
Why should VOG drill 2 new wells and do they have to?
I have just taken a look at the reserves report and well flow rates and it's unnecessary up to 20 scuffs. what's more if the lower flow rate well gets a work over then they can supply a second gas plant without a new well and expand to 30 scuffs for the next 25 years.
As the drilling is not urgent and if you look at the numbers it doesn't appear to be, we come back to the same question. why drill in 2015?
Perhaps it's for the next step of building a relationship with ENEO and a much bigger deal, or to see off the likes of Bowleven who won't stand an earthly chance of building a market in Douala if VOG hits gas. Maybe is for resilience to assure customers that they have secure supplies. Whatever, it's not to cope with current demands
Incidentally, VOG have their exploitation licence for the field so I assume the new wells, if drilled, can be linked to processing plant as and when VOG withes to. With that in mind perhaps the next capital expenditure should be on a processing plant.
If the wells are indeed drilled in 2015 then it will be for good reason and the sort of problem most companies would love, sky rocketing sales
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