RE:RE:RE:RE:RE:Um... What?To the best of my knowledge there's no regulation stipulating the release of corporate plans (if so please educate me). There are regulations stating you can't mislead the public, which would result in a shareholder suit, no doubt, I've been a party to as much (ABX Pascua Lama). I think the release was fairly specific about how Phase I of the plan would be funded.
Feel free to report the company to securities regulators if you feel their press releases are materialy misleading, it would be a help to us all (I'm not being sarcastic, if we are being mislead our money is being stolen, that's a pretty strong accusation).
I'd also argue that releasing a plan is not terrible IR work, this is as much an opinion as anything else, as an investor I'd like to know what the plan is. Only the future will tell us if they need to raise funds.
You're either REALLY concerned about your fellow investors or have a serious axe to grind... also it's called the Shell Game. Simple math following will summarize the cash flow plan.
From the release
https://www.qxp-petro.com/#!pr-june-30-2014/c1m55 (sorry about the length)
The Company anticipates that its development drilling efforts combined with its ongoing remediation and consolidation will carry QUATTRO's 2,500 boe/d exit target in 2014, up to 3,500 boe/d (net) in the 12 months ending June 30, 2015. The development wells are all incremental activities within the Company's operated properties and will be operated by QUATTRO. This positions QUATTRO to quickly tie in new production at minimal cost. The allocations of these activities are as follows, on a net/gross interest bases:
2/2 Vertical Oil Wells at Oak, BC - Targeting the Halfway with in our current production pool
2/1 Horizontal Oil Wells in East Central Alberta - Targeting the Ellerslie within our current producing pool
4/4 Oil Wells at Rangeview, Saskatchewan - Targeting the Madison and Shaunavon
8/40 Oil Wells at McMullen, Alberta - Targeting the Wabiskaw
8/10 Vertical Natural Gas Wells at Donalda, Alberta - Targeting the Viking, Mannville and Belly River
23/60 Diversified between 16(net) oil and 8(net) natural gas wells, QUATTRO's net cost being approximately $13.5 million. This is what the board has approved 'phase I'
The proposed wells are located within QUATTRO's existing lands, operated by the Company where there is proven production and established well performance. Therefore, they have been deemed to be low risk development wells, using proven drilling and completion techniques with unrestricted access into our existing facilities. The Phase I program is estimated to be completed at an average cost of $18,000 per bopd for oil and $7,200 per boe/d for natural gas.
1/2 Exploratory well in the Williston Basin and continuing exploration efforts are budgeted at $1.65 million and will be used to further evaluate the un-booked potential currently identified in southern Saskatchewan.
The balance of the budget totaling $35 million has been allocated as follows: $20 million in Western Canada in 2015-2016, with the remaining $15 million expenditures in Guatemala in the second half of 2015 and 2016.
The capital budget will be funded from cash on hand and the allocation of 70% of projected cash-flow from operations anticipated in the next 30 months. Phase I of the budget is supported by our trailing performance and engineering independently reviewed in May 2014, by our lender prior to the approval and funding of our updated fixed term load. This is how they are going to pay for it and I'm pretty sure most lenders would be fairly scutinous of a junior oil company, at least the ones I've worked for are.
The Company is also pleased to announce the negotiated increase in its term loan facility with Business Development Bank of Canada ("BDC"). The current loan of $5.125 million was replaced with an $8 million term loan with the additional amount used to payout a capital lease and the balance of $2.35 million applied to working capital.
Cash on hand + 2.35 + cash flow for operations = funding for 2014
1m+2.35m = 3.35 meaning they have to come up with 10m over the next 30 months. 10m/30= ~350k/m cash flow. 1500boepd x 30 =45000 x net back of say $15 = 675k ... So 350k sounds rather doable.
Feel free to report the company to securities regulators if you feel their press releases are materialy misleading, it would be a help to us all.