biggest concern I have is bank debt In very simple terms last year the bank approved an LOC of $36,000,000 with the reserve report that was generated for the year ending December 31, 2011.
Now this year's report from December 31, 2012 shows a reserve decline of about 25%. Now there may be a slight change in the proved versus probables ratio etc but the reality is you would then think the bank is going to say we are going to cut your LOC by 25% or $9,000,000.
therefore it would be reasonable to say that in some fashion Exall is going to have to come up with $9,000,000 cash to give to the bank. The bank will not demand this and will certainly work with them to get this figured out but at some stage they are going to want their dough.
So you could be looking at a PP or another debenture (cue laughter) in the not to distant future. I am sure they were hoping for a bigger bump in their share price yesterday and today to give them more options.