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Logistically potentially but practically the current situation makes local energy strategy in the whole region more attractive

At current pricing dilution would be a disaster to fund the drill but potentially highly accretive on the top half of the balance sheet. Taking equity is great if taken for the right reasons and for the right assets.

Im not as the market will risk accordingly - at present the market is risking Timor to oblivion and rightly so given that a share issuance for that purpose would severely dent the economics for shareholders. As such the upside is enormous as they get closer to booking reserves.

I’m expecting dilution as part of finance for acquisition but it will be good value and underpin the company as well as give it optionality of funding sources for both chudditch and other projects.

They Havnt pulled it off yet though….

The real hold up with Timor as I have always suspected is likely funding. At current share price levels they are locked out of the market for an equity placing to raise 9m as doesn’t make economic sense and exposes them to a risk that if something happened on the drill they could effectively default.

What they are doing is the right thing - said it months ago. Delay drill and underpin the company with hard assets that give it more flexibility to raise and realistic pricing whilst underpinning the price with real booked asset values. If you do the maths , even 100pc dilution for production assets makes sense but 100pc dilution at current prices for an appraisal drill absolutely does not.

We have yet to see if the board will pull this off but in my view they are doing the right thing.

That sell will have taken a while to fill over a few days.

The key driver from the share price from here will be the acquisition not Timor near term.

I’d be surprised if they entered exclusivity without proof of funding. So the deal will likely be announced if they can agree terms within the next 7-14 days I would imagine or an announcement that they couldn’t agree. One way or another it should conclude imminently.

The numbers are so staggering here that if Sunda did 100pc dilution at current price but took on 2000 barrels of production with longevity it would be hugely value accretive.

I’ll be opposing the deal. There are upsides to be sure in that it will provide the cash flow to fund either other acquisitions or the appraisal drill at Anchois - however the cost is excessive. 90pc dilution up front and more to come in the future. The commercial risks don’t frank the upside in cash flow.

From a dilution perspective it’s derisory and adds almost no equity value at all until oil prices reach much dizzier heights than they are at.

The only upside from the deal is it pays for G&A and gives some optionality of funding future projects including Anchois - although finding financersbwilling to lend against Angolan assets isnt easy!

At one point in the presentation is states in isolation they are in advanced discussions for a “material production acquisition” - it is implicit that it will come with a portfolio of other assets also but it’s the first time that they have referenced material production in isolation.

This narrows the screen to 3 possible known asset sales on the block for sale.

The delays are exhausting. I think you will eventually see three players in Anchois - the state , chariot and another farm in partner with the state paying for its share.

I’ve screened all of the assets that are formally on the block for sarle that match on a portfolio basis production and development/exploraration. It could be off market but unlikely given Sundas size. Of the 6 two can be excluded due to scale.. of the remaining four all are very material.

To say that today’s RNS has put my mind at ease is an understatement! Very pleased albeit it’s only done when it’s done.

Note that the farm in with Timor is expected to be amended to provide accelerated funding for pre drill contracting which will reduce the immediate need to raise capital to fund contracts

Read closely :

- portfolio of production and devevelopment assets

- confirmatory DD is final tick box dd

- if they are negotiating SPA now then they already know how they will fund it

- AB is onky funding transaction costs not the full acquisition. He will likely be refinanced out when SPA signed with whatever term aheet he has with acquisition finance.

The point bere Malcolm is that if completed this acquisition likely puts them on a multiple of today’s price with significant optionality on funding their bi prize. Completing this deal is now of the most importance.

12 -15 pc is a standard Private equity and mezzanine debt interest rate when subordinated.

As I said one of their acquisitions will be the focal point for value rather than chudditch near term

Your answer is in the last set of accounts where they tell you the monthly burn. Stripping out 200k for exceptional items they are about to be running on fumes from fwb/march. Another raise is inevitable even with a funding deal as it’s unlikely to involve any cash.

Cavendish has increased the RISKED price target to 118.5