RE:RE:RE:RE:RE:Is a recap coming?Net income included a one time gain and depends heavily on the correct valuation of assets. Yangarra uses Deliotte for reserve reports, which is not the industry standard.
The Alberta Treasury branch only accepts cash, not net income They are going to pull back lending to YGR by the tens of millions. So how does YGR meet this demand and continue to drill enough to keep production from falling too much?
They need greatly improved drilling results and higher pricing, especially from gas. Luckily, the oil price seems like it will be quite decent this year, probably averaging $80.
It's unclear to me if YGR is technically inept or they have already drilled their best inventory. They need to find a solution quickly, they are running on legacy wells and all the cash is going to pay down bank debt first.
As far as exercising options, they are further diluting existing shareholders, but they are contributing cash to the business they have made a mess of while I am not. It's a little bit more cushion against the worst happening.