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Charlie likes a Friday RNS

Eytan referred to several sources of funding in last weeks interview. Dependant on the creditors agreeing to come to an accommodation.

Bottom line here is assets worth 4-5 times debt.

Perhaps the payment of the outstanding gas has unlocked the door for an investment partner in Nyuni and Killiwani. This has been mentioned several times by the company.

Meanwhile, the Company, having applied for a 3-year extension of the Nyuni Area PSA with a revised work programme in 2019, continues to await a response from the Tanzanian authorities. The Nyuni Area is proximate to the Kiliwani North licence and consequently in an area of existing gas infrastructure. We see this as another opportunity to reduce risk by pursuing a consolidation with another operator in country or a farm-in partner to assist in the further development upon Completion of the Farm-Out.

https://tanzania.gazetiapp.one/pura-meet-noc-iocs-for-work-plan-and-budget-discussions-22846.html

To lend against the assets, any bank would have to consider whether they would recover their money if the oil fields were sold. I believe the Columbus assets were valued at £20-24 ($27-30m) when oil was $40 and bought by CEG. Since then, the reserve base has increased 30% and the oil price is now $80, increasing the value of the assets. Whether the value can be released as equity for a facility will be determined by the bank or specialist lender against oil assets, such as Arena.

https://dailynews.co.tz/news/2021-11-05618536344f581.aspx

The alternative is, to use the RBL facility to pay back immediately the creditors. This would be if a bank is willing to take the total risk of the assets delivering the forecast production and CEG able to service the funding facility. This would be the most simplist solution, but depends on how a bank views the likelihood of the assets delivering the necessary production and the operating cost base of the company and the profits, to fund the facility and the interest payments.

Of course to increase production you need capex, and in order for this to be achieved by CEG, any RBL is going to have to meet a forecast production that can payback the loan. The amount considered will be based on reserves valuation and the assets to meet production forecast. The field that CEG own have hundreds of wells. The best wells can be brought back into production with workovers. Additional producing wells infill wells can be drilled that can increase production, reserves and the asset base. The ability to increase production and cashflow that meets forecasts so the RBL can be paid back is key. The creditors meanwhile, will need to agree a payment schedule that will allow CEG to work the assets.

You seem not to understand how RBL works. I would suggest you do more research. As for demonstrating forecast production. This can be achieved from current production and work programmes and oil price. The amount that can be borrowed is governed by reserves and the price deck used based on oil prices.

Everyone is over complicating this. It's a simple case of borrowing against the asset that a bank is comfortable with based on reserves and forward production forecasts. There can't be any equity dilution as this has been exhausted and the current sp will only raise minimal amounts. Asset dilution is the only route and the main source of value. Coupled with creditor agreements that are going to have to be flexible, partial repayments over a period of time that will enable the company to increase production and cashflow is the logical solution. No one wants to see CEG go into administration. It's far better to have a bank with huge capital resources in charge of the assets against a loan with a facility that bears a affordable rate of interest, that is not going to foreclose while the company rights itself, rather than disgruntled creditors taking matters into their own hands. The company can be profitable. It is this type of arrangement that will ensure monies owed are paid, albeit with further flexibility needed from existing creditors, mainly Stena, who are a huge organisation that can afford to effectively treat the money owed as an interest free loan while CEG work on clearing the runway.

Why do I get the feeling AEX are sitting on some big news??

Mostly buys shown as sells.
2m at the end probably a buy. How did they get 0.8p if it was a sell.

Yes Alan Burns. Found lots of oil in his time. He would be drilling the second well.

vike1 you are right. He mentions he oversaw NT2. I didn't realise.

And here
https://www.youtube.com/watch?v=1K9G5iHNyEg&t=51s

This is him
https://www.youtube.com/embed/bhw8DHGvA_w

Getting very interesting here now.

Agree we can expect some farmout activity regarding Nyuni. Doors have been fully opened and wouldn't surprise me if there is already an agreement with WEN and it's a matter of getting the paperwork done.