Cash Balance After doing a little more calculation, TAO could start generating some serious free cash flows over the next couple quarters. Based on last quarterly report, the company generated about $4.4 million in operating cash flow after subtracting $22.2 million for facility expansion. That cash flow came from only 1848 boe/d production. Now if you take management word that they expect over 5000 boe/d by end of March, even if they could just average 5000 boe/d for one quarter with no major spending like thy did for the facility expansion, TAO could easily add $40 million in free cash flow for 3 months if they average 5000 boe/d production. That would take their cash balance to well over $120 million plus taking into account new spending on sidetrack wells, new wells, etc to at least maintain close to 5000 boe/d production.
https://www.tagoil.com/pdf/F51QtrEnd_9-30-12.pdf
Bottom line, if they can maintain production of only 3000 boe/d, this company could generate enough cash to take a run at East Coast on their own if they don't find another partner. In another 3 quarters, there cash balance would be over $200 million if they don't do major spending but just the necessary new well spendings to maintain 3000 boe/d production and high Brent and natural gas prices.