RE: oilexco going underHow can they survive....
If they had 50M in cash they would be in great shape in my opinion.
Someone please correct me if I am mistaken....
I expect they will have $3M left at the beginning of next year after paying their existing commitments.
This will have to pay the salaries of the aprox 12 employees, keep the paper work up to date and the lights on.
With no further money they would burn through this $3M in.... 6 months (really rough guess... other opinions/comments appreciated)
They will eventually have to raise money (obviously)
either a little money to hold on and evalute existing data and plan further drill programs
or...
A LOT LOT LOT of money to plumb some the their discoveries
Clearly they can not get their hands on a lot of money, no one can.
so...
The smart thing is to not even try. (it would be way to costly right now)
They should just try to get through this tough time with the team intact and all paper work and fees up to date.
Now the bright side ( well... relatively ...)
1) They have NO debt.
The profit that they made recently was from interest on the cash they had in the bank to pay for existing commitments.
2) It seems to me like they have done a pretty good job finding oil and gas.
3) I think management has done a good job getting the past work done while staying lean and out of debt.
Their moves seem prudent to me in hindsight.
I hope that they raise just enough money in the comming 3 - 6 months to keep the lights on and keep the team together for 2 years.
I hope they raise this money NOT by borrowing it, and NOT by issuing shares, but by selling a percentage stake in some of their discoveries. (which they have plenty, and are worth little if they can't keep the lights on)
That would get them out the other side.
If they stay afloat, and oil goes up, (which it will someday) the value of the stock will rise a bit as the markets recover.
Then (ok... I am dreaming here) when all the liquidity that has been pumped into the system but is currently blocked up gets moving, they can file a development plan, get some money and develope their fields.
In my opinion... this is the senario that sees this stock above $5 in 2 - 5 years.
and if they can't keep the lights on, or if they borrow a lot of money now...
That is the senario that ..... ( I can't bring my self to say it)
GLTA