Daybreak Oil and Gas Inc (DBRM)

[xiws]

Loans vs share sales for funds for development
Ok, I wholeheartedly agree getting more drilled and more production is important, and is (positive hopeful thought here..) very worthwhile.

Here's a thought then - my preference, without any other specific data to go the other way, is that if DBRM needs more cash then get a loan. A bit hard in this market, but getting a loan is a very different level of overall expense and dilution than trying to run a share sale through private placement, etc. The loan, in this market, would have (relatively) low interest, and similarly low costs to arrange. And it doesn't directly impact share price. Payback runs over time and comes from production revenue. And getting a loan means that the source of funds is rather confident that the projections on production and cash flow are such that they will get paid back. That, to me, is another independent indicator of confidence in what they are doing.

A pipe, on the other hand, has a lot of legal, SEC and placement agent finance fees associated with it and requires a discount from the current share price to make it worthwhile to the participants.

If they have a really good story, with up-to-the-week production numbers, a loan funding may be available and be a good choice for paying for new drilling.
How's that?