RE: FinancingIf you read the Blackmont report it is made quite clear that as of last Sunday they needed to commit to the Chevron rig or they would not be able to drill the Piper until next year. The commitment to the rig was dependent on cash which they did not have available. You are assuming some warrants have been exercised not knowing whether any have or not. Warrants represent a free ride until Dec '09. There is no sense in exercising unless you are leaving the play entirely and moving on. I doubt that too many warrants have been exercise at this point.
The Durango was originally a $30 million well based on 45 days of drilling. Since it took about 90 (give or take) with a lost drill bit added in just for fun the math is pretty basic. The company has debt left to pay for the drilling.
So, without a doubt, they are in need of money and I expect the news is close based on the market activity. Where do you thinkg the stock might be trading if they were not able to commit to the rig or if the financing was an equity issue? Lower!
It is simply a reality and the market is accepting the financing as positive.