RE: Financing“They do not have enough cash to drill the Piper due to the cost overruns on the Durango but, that said, I doubt we are going to see an equity issue since the stock continues to hold its trading range.”
Yes Durango had overruns as it took longer to drill than originally thought. But unless you analyse how much $ was eaten in that overrun against how what $ they had on hand + how many warrants have been converted at this time (they are in the money) for more $ it’s nothing but a guess at best. Just b/c there was an overrun doesn’t mean anything. What is needed is to be known is how much of an overrun it was. No one seems to know.
US$4.1 mm net (25% of costs) is what is expected to drill N. Piper. That is not a lot of money, in N. Sea relative terms. Just conversion of 8.2% of the outstanding warrants could give BUK US$4.1 mm.
The odds are that they will not need the money. I doubt that BUK would lock in a drill rig, a month out from now, without currently having the funds on hand and trying to raise $ in the mean time. That would be cutting it way too close and dealing from a position of weakness. If the market knows you need the $ b/c your timelines are tight they will give you a rotten deal to get as many cheap shares as they can at a suppressed price.
Makes no sense to me. If they needed $ it should have been done first and then they lock drilling time on the rig.
If you really want to find out what the $ situation is then call or email the company and ask.