Stated it before Some here refuse to see it but the large debt and no cash to drill ARE an issue. Yes, some assests have been sold with others for sale but with the amount of debt coupled with the capital requirements I see a rough road ahead. Facts you say? Well, how about the most recent M&A from SEDAR then!
Basically they have enough funds coming in for interest on the loans (not repayment), overhead and not much else. These are the companies own words via SEDAR not mine so don't shoot the messenger. JMHO
and I quote from SEDAR"
OUTLOOK– April 24, 2013
The $17 million Bigoray-Niton acquisition on July 31st was financed with debt instruments consisting of
a $2 million loan from Anglo, a $ 6 million bridge loan from a financial company and the balance from
the Company’s credit facility with ATB Financial Services (“ATB”). The Anglo loan was cancelled
upon the business combination of Anglo and Tallgrass.
The Company is generating positive cash flow at the field level sufficient to cover interest expense,
overheads and a modest amount more, but there is still a need for capital to maintain and grow its
operating base. The Company would benefit from investment capital to reduce loan amounts and to
undertake a drilling program on the Bigoray and Niton Lands. Management is focused on attracting
capital and feels that it has a strong opportunity base of low risk drilling locations and large land
packages. The financing environment has been challenging for small companies however the Company
has several paths forward including the monetization of its non-core assets. Tallgrass has sold some
assets in Saskatchewan for $818,000 and has initiated the sales process on several other non-core assets.
Technical work has outlined further opportunities in the Company’s large central Alberta land package
that includes 120 sections of Duvernay formation rights.