Norton, I think you have hit the key dynamic of the WGAS strategy, with this springboard concept. We know WGAS has fairly huge existing debt, and very little cash, and that's why they had to enter into the series of short term CD loans. Got to pay the bills.
But the team has been good at bringing in partners (like Silvermere) and giving up revenue interest, but not having to pay development costs, to move the projects along. This is probably part of the continuing strategy. "OPM"
The better way for shareholders will be through financing, since the only cost to that is loan servicing, no need to give up equity or well production revenue, and no dilution risk. But to do this, the lenders have different tiers for security. It is all based on the OIL, and the level of reserves. I'm no oil man, but Wikipedia has a good breakdown of the categories that the SEC recognizes and can be relied on, from unproven to proven up to producing, and a higher % of reserves can be borrowed against as it goes up the ladder.
so bottom line, if I-1 starts flowing, no matter how small it is, that is an escalation up the borrowing structure, and will begin opening up more lines of credit for internal financing.
We all want to see the max flow from I-1, especially flippers who have their own criteria and trading targets, but I'll be glad just to see some hard production coming through, and it will give Tony that much more to work with, and move everything along the road to a solid growing oil company. JMHO.
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