RE:Should'veInga sale was good management practice - fail fast. Relying on borrowing base redetermination syndicate financing doesn't work obviously. Nor assuming you will get full value for your reserves.
Anyway, moving on. Lets take the company at face value and read between the lines:
- no syndicate until "2021" is pretty vague, yet keeping a small credit line while repaying the debentures indicates to me that they have further asset sales to come to fund development or they have other financing lined up (BDC?).
- I don't recall EURs being published for Wembley. They appear to be very good (~500K oil). The infrastructure is in place so should be capital efficient to grow production there. Its the only area they are drilling in the 2nd half. Charlie Lake 5 months payback on Lower. Neither emphasized before, now both mentioned in Press Release and presentation. If they were selling these, they would not bring up these positive developments.
- It would make sense (to me ?!) to focus on the areas (Wembley/Charlie Lake) that are the most capital efficient and to invest what cash they have there according to a payback model. This alone could be very rewarding to shareholders knowing that they don't owe any money to a syndicate yet are able to both grow production (from the production coming from wells in their post payback period) and generate cashflow (again from the production coming from wells in their post payback period). To do that, you obviously need a certain amount of cash to invest and recycle every _ months (the payback period). If this in turn becomes a solid asset base with good cashflow, it could be used to fund the next thing (since its not being borrowed against in the 1st priority).
- Oak/Flatrock they emphasize now...they must have confidence in it if they sold Inga although they drilled quite a bit earlier in 2020 and have not reported much in the way of well results. Perhaps they're looking to accumulate more acreage. One thing for sure, they will need committed funding to proceed - wouldn't want a repeat of Inga. Perhaps this is what syndicate 2021 is about - getting more reliable funding and moving away from borrowing base redetermination.
GLTA
ngtraderng wrote: Should've kept Inga assets and debt. The company was worth more as a speculation on rebounding prices than a company with a good balance sheet.