LGX Oil + Gas Inc ROAOF

RE: RE: Guidance Notes Administration

[edsyl]

I would think that there are a few key issues here.

What is the probability that the rig operators will take a restructured rate or contract?
Is there honour amongst these folks, will they stand by an support Oilexco, who has been a partner for a number of years now?
Rigs must certainly still be in demand if for no other reason to meet the parcel drilling requirements.
I will let others with more knowledge on that side of the business to comment.
If not, then the company is effectively unable to develop anything on the discovery side( Huntingdon, Moth) and will be left with whatever could be tied in within a window of time(up to the Admin) for production.
Then what?
The Bank syndicate. What are they prepared to do in the way of restructuring debt? Another variable.

Also, what is the conservative nature of the Admin? Does he take a guesstimate at the future Brent price into consideration or will he monitor it for let's say 6 months to see if the company can generate cash flow to satisfy his requirement for solvency?
Ir the Admin wants to maintain the company as a viable entity, I would turf the rigs if unable to get a better restructuring and then focus on costs and production increases of existing assets in place, and then we might have a hope if Brent crude maintains a healthy price.
I don't know that.


What happens to the discoveries that will lie  fallow if the rigs go away?
What is the time period on that?