Persistent Cash BurnConsistently negative operating and free cash flows mean the business cannot self-finance exploration or appraisal. This structural cash burn increases the likelihood of dilution, asset sales or partner dependence, constraining long-term project timelines and strategic flexibility.
Deep UnprofitabilityVery large negative margins and persistent losses erode economic returns and reduce retained capital. Over time this undermines equity value and weakens the company’s ability to fund development internally, making positive exploration outcomes imperative to restore profitability and ROE.
Dependence On External Funding/partnersWith no steady production cashflow, progress depends on securing farm-outs, JV partners or asset sales. That reliance exposes outcomes to partner decisions, commodity prices and regulatory approvals, increasing execution risk and the timeline for converting resources into sustainable cash generation.