I think the debt extension if needed into the middle of 2018 really is the best news we have had this year. It really gives us room to strike a good deal with a farmout (hopefully) and puts us in a position that many other companies would like to be in. I think we will have a farmout of Barryroe early next year.
And a bit more news to keep the show on the road. Stolen from Malcy's Blog: Providence Resources A trading statement from Providence this morning and given what’s been going on in the last couple of years it’s pretty upbeat. Barryroe is still awaiting farm-out but ever was thus, apparently it might be ‘in the new year’ but don’t stand on one leg waiting for it to happen. In recent months the company, for a number of reasons, has increased its participation in a number of offshore licences and formed a strategic alliance with Schlumberger as well as participating in the Atlantic Margin licencing round. There is also substantial farm-out activity with Spanish Point, Hook Head and the Atlantic Margin assets all having data rooms open. A bit like Europa there is much going on but in some cases various pieces of the jigsaw have to slot into place before it’s your turn, the announcement of the winners in phase one of the licencing process is a case in point. Finally the company has secured an extension to its loan agreement with Melody Finance through to May 2018 if required which should take the heat off things somewhat. Given the traumas of recent years things do look to be steadying up a bit at Provvies and whilst much is dependent on appetite from the big boys around the Emerald Isle you can’t write it off yet…
Hopefully the existing shareholders will be OK when it comes to the issue of new shares, and once that is done, most of the debt will be taken care of, and the shareholders will be left with one on the biggest Titanium mines in the world. We can only hope that the dilution will not be too bad, and as one poster who contacted Kenmare said, they have said that they will do their best to protect shareholders, We will have to wait and see. The big number is fifty million pounds that they must raise from existing shareholders. I would image that the majority of that will come from the big shareholders and after that lets hope for the best.
I know this point has being made many times before, but anyone buying a stake in Barryroe will not see oil flowing for a couple of years, so the fact that the oil price is low now, should be theory have no affect on the farmout. What will be price of oil be in a year or two. If oil was one hundred dollars a barrel today, they would be massive interest in Barryroe, which would be a bit mad really, because when it would come to selling it the price could have fallen. As the long term out look is positive for oil, now would be the best time for anyone to invest in new exploration
Sometimes it is better to give a rights issue a miss, as the share price can fall after the issue, and you can pick up extra shares that way. As it is no one knows what way this will go as regards the issue, so we will have to wait and see, and hope for the best.
Kenmare is hoping to raise fifty million pounds from shareholders, but with a market cap of fifteen million pounds this morning, it looks like major dilution. I suppose if the share price gets to one and a half pence, they could then announce a share placement or rights issue of two for one and say that it is a fifty percent discount.