Matchmade26 Jul 2018 10:02
As do you, but its worth noting that these are the necessary evils of the step up we are taking, exploration and development is costly, having cash, no debt and clever management is what stops us falling into the pitfalls that so often cripple small oilies. This year was always going to be expensive, with outlays in 5 fields, major capex in 2 of them. Whilst Morocco has cost $20m+ since acquisition if you include the upcoming 3D, its brought cash in at a similar rate to expenditure, and offers the best route to quick returns fast, $2m+ a month by year end, with even more to come. South Disouq has cost a similar $20m to get to a production position, but will start adding by year end at a rate of at least $1.25m a month if you include the cost recovery clause. At least $10m will be spent in 2018 on the other 3 interests, unavoidable costs which keep the income churning.
This all adds up to a juggling act for our CFO, balancing outgoings with income, dragging anchor on desire over reality, we all want rapid returns, but its a sign of the abilities of our whole team, that we have achieved all these ambitious projects. I estimate that by year end we should be roughly even, all projects paid, $35-40m in cash and working cap, and the income increased to $6-7m + a month. Yes we will still have major Capex to come, but that should return bigger and faster rewards. Forget South Ramadan for now, NW Gemsa is mature and will stop bearing fruit in time to come, but the 3 other areas are new puppies and require the same nurturing care, as they offer great returns on the risk/reward ratio. In my mind, not a good place to go btw, Morocco offers the fastest route to success, if we can fulfil demands in the allotted timeframe, then slow defined expansion at South Disouq is made easier, and our CFO can release his firm Scottish grip.atb
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