RE:RE:RE:RE:RE:RE:RE:RE:RE:Kavern 23No, at this time I'm just focusing on what Q1/22 may be like.
I have my estimates for Q2-Q4 but they are just point estimates at this time with very wide variances. Those estimates will tighten as they approach.
Right now we are 2 weeks away from the end of Q1 so getting pretty close to having solid numbers. ie 11 out of 13 weeks are in the bag.
The first half of March had higher than expected oil prices. At least half of those two weeks were hedged - so 2 of the last 11 weeks had higher than expected oil prices. Half of the production may have benefited. Not much of a difference - but maybe a windfall $3 million ish.
I'm not expecting a material change in interest in Q1. I think they may have made about $120 million in cash flow, which is offset by about $100 million in capex. There are some timing issues - ie some of that capex won't be paid until Q2
There will be a good piece going towards share price performance - I don't know how much this will be, but it will be a fair bit - maybe around $10 million.
The real debt decline may not be felt until Q2. This is the quarter during which very little is spent and maximum production is observed from all that Q1 drilling. I'm thinking something like $143 million in funds flow for Q2. It will arrive over the course of the quarter, so may reduce interest costs by $1.5 million ish. Thats not a big number in the scheme of things, but its one more addition on the positive side.
On the debt side the most interesting part for me will be how much do they reduce net debt by the time it is refinanced. There may be so much uncertainty presently in the Q2 funds flow, that they may choose to wait until they have a better idea of that number before they do their refinancing. Given that they hedge about a month out, sometime in May they should have a much firmer idea of what their net debt will be at the end of Q2. They could have net debt around $250 million at the end of Q2. IF they get debentures for about that amount, they may have a lot of extra cash accumulating in H2.
That will also be the time they can announce how much they will increase capex for H2. At the moment they only have about $50 million budgeted for capex in H2. I think that will get doubled - at least. A lot will depend on what options they have ready to drill at that time.