RE:RE:RE:RE:RE:Company main value is it's Casc reserves and they shouldmatt2018 wrote: understood Tad. It all sounds promising and a great opportunity for some synergies but the company has very little cash. They need to borrow $10M for their 2025 plan, now borrow more money to fund this CB purchase (I realize it could fund this portion with current CB production but still a risk), all while the share price is in the gutter so you cant even fund a partial portion of the borrowing by selling some shares.
Its a shame their assets have not performed as originally planned, a $1 to $2 share price can really help fund/expand this company.
Now more than ever, look to the cost side of the company.
Cut wherever possible, like the number of directors on the board, etc.
It might appear on first glance that the company is "tight" on funds. No doubt they're stretching a little .... however,
A bit of back of the envelope estimates:
Based on known production for past two months and projected December production revenue including oil from Cas 3, there should be approximately $17.6 million revenue in Q4, (if TXP has managed to get the Cas 3 oil production of 600 -700 bpod in December)
Expense estimates based on past quarterly financial nujmbers
Quarterly loan payments of $1,500,000 and $625,000.
Bridge construction in Q4 $1,500,000,
Capex to deal with oil production at Cas 3 in Q4 maybe $500,000
Royalties of around $4,000,000.
General and Admin around $5,700,000.
Income taxes around $1,800,000.
Comes out to approx. $15,625,000 expenses in Q4.
Could be about $2,000,000 profit in Q4.
Company had $6,550,000 in the bank end of Q3.
Roughly $8,500,000 cash at year end. All depends on how much gets paid to creditors in Q4
TXP had $4,147,000 debt facility available at end of Q3.
Additional $2,125,000 in debt facilities available after the Q4 payments,
Should be roughly $6,272,000 available from debt facilities year end.
So the comany isn't as "tight" as is being portrayed by a number of people on other forums who are saying TXP will need to do an equity raise to fund the Central Block acquisition. I think the chance of an equity raise is very very slight. Republic Bank in Trinidad already has credit facilities with Touchstone and are quite accostumed to financing in the oil and gas industry.
Bottom line for me is TXP will be paying $23 million with debt financing for infrastructure worth $50 -$60 million to build today, and getting roughly $4.5 million per quarter in current production revenue and access to higher pricing for future gas production compared to the $2.50 mcf they are under contract with on Cascadura. Pricing that could be 2 or up to 3 times as high. And the Central Block acquisition would basically be self funding from current production .