Post by
uograd on Sep 12, 2022 4:14pm
just talked to my friend warren in omaha
He said he got this call from this canadian drifter about a helium play that needs financing.
as he munched his dairy queen burger he took a look at the numbers.
the capital is 10.5 million. apparently this play will produce 5 million in revenue at a 50 per cent margin
so because charlie is in a good mood they ran numbers the number at 10 per cent interest.
so in year one, the well accrues a debt of a million bucks rounded off.
then in year two it accrues a debt of a million bucks and make 2.5 million so they put 500k off the main loan.
from year 3, accrues debt 950,000 and make 2.5 million put 1.55 milion off main loan.
patten contineus so it will take 5-7 years just to pay the loan off, no income to the company or the shareholders
also likelihood of additional capital costs in year 4-7 which is why I extended it out to 7 years
Warren finished his burger picked up his phone and bought more occidental.
Comment by
Wheels54 on Sep 12, 2022 4:33pm
Funny write up but I don't think this is quite the case. They will need more funds one way or another to get this thing really rolling though. With a P/B of less than 0.5 with nothing much fundamentally changing over the last few months and still the only HE with income, no debt and lowest number of shares outstanding they are still sitting pretty nicely compared to their peers.
Comment by
uograd on Sep 12, 2022 4:37pm
i thought it was funny too. tomorrow I will writeup my call my with other buddy elon about the helium purchases. worked out so well for royal helium they are now trading lower than they were before their annoucement.
Comment by
Wheels54 on Sep 12, 2022 4:59pm
Lol yeah maybe when royal actually gives some details they'll get rewarded for it. Ghost agreements don't tend to provide sustained excitement.