It's a given they will survive in worst case scenario with the cash in hand at least until mid 2015, well past the time by which the FDP would be submitted and approved. As and when approved the RBL will be available, plus hopefully either cash in from contractors or a jv partner, or better still, an acceptable t/o offer. Jmo..
The gloomy voice of Reason (Hey, that rings a bell...) How art thou this eve? What of this tumbling drunken sailor of a SP, with his tattered trouser-knees after a return from the wild fathoms and a day in the dangerous arms of Leith pubs and knuckledustered fancywomen? Will we ever be rehabilitated to the colour Blue?
Alas! I am very sorry to say That 1.25 pence have been taken away On the last knockings today at 16:39, Which will be remember'd for a very long time. I must now conclude my lay By telling the world fearlessly without the least dismay That yon SP would not have given way, At least many sensible men do say, Had it been supported on each side with RNS's, At least many sensible men confesses, For the stronger we our FDP do build, The less chance we have of being killed...
Or at least that's what old William McGonagall told me via the ouija board. What say you? I trust all is good in Chez Plunge and thriving? Open a tin. Good luck matey. GLA. Onward ever upwards!
I'm not worried about micro economics, thats the opposite end of the scale to macro-economics. I'm not worried about macro's either, I'm concerned more about them than anything else - guess it depends on your investing timeline. A major decline in growth is one thing that could see a prolonged reduction in oil prices as could emerging technologies. Sure people still get up go to work (or not) but less oil may flow and less money get spent, in these conditions we might see less appetite for financing big projects. Not that I think thats happening any time soon. But such risk is always present.
Anyway I agree that short term oil price fluctuations don't matter in the long term, if a company can survive it.
My post was really simply to point out that there are always many business risks and XEL is no exception....
the wheels keep turning the economy grows and shrinks but things still get made, people generally get up and go to work every day, spend money and oil flows. Even after the biggest crash since the 1930 things carried on for most people and only a few years later here we are.
these forecast change monthly
50 years of production, I’m sure there will be a few recessions within that period.
6 months from now oil could be back to $130 per barrel
I wouldn't say financing is the only risk, I'm more concerned with the macro-economics, look at what the falling oil price and political jitters behind it have done for some oilies sp, as well as the IMF reducing forecast economic growth rates by a mere 0.1% or sumsuch gnats cockery....
It is impossible to know how the market will react. But the financing is the only risk. Once this is resolved what’s the risk? We do know the undeveloped field is valued over £4 a share, even in a poor market a 50% discount to NAV is not an outrageous suggestion. but didn’t Rupert say the share price would be equal to NAV once the FDP is approved.
He's probably not shedding any tears. Many warrants expire mid year 2015 however, so could be a close run thing if XEL get the FDP in end 2014 and there actually is the bounce RC predicts from same. Questioin of just how much. Upside float reduced, downside less cash, though hopefully with the RBL in place by then not really relevant.
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