Where's the Value?The equity will be the smallest peice of any deal going forward. Whether it's 60 million or 100 million for the equity, it will only represent 5% of the overal deal given the outstanding $2.5 B worth of paper. So share price estimates here really mean absolutely nothing in any deal going forward ......and is 95% perception rather than value. Perception at the moment as you can tell is at an all time low and fear is pushing that further than anyone probably expected.
At 28 cents - another company trading at $28 a share could issue 2.8 million shares for all the outstanding stock of OPC - it's just a small chip of the shoulder but the big question is what do you do with the paper.
Dec 15, 2012 - $525 million due
Aug 15, 2013 - $300 million due
Dec 15, 2014 - $1,750 million due
$2.5 B @ 9% avg interest $125 million per annum or $30 Million per quarter
at $30 million per quarter in interest payments - with zero revenue generation the company has liquidity to handle 20 months of interest payments.
Revenue last quarter was $59 million throw that into the mix and there is potential for weathering the storm should that grow into the the $60's million.
P2 reserves = 711 mmbls lets say it's worth $10 a bbl in the ground = $7 Billion value
Contingent = 1,114 mmbls lets say it's worth $2 a bbl in the ground = $1.1 Billion value
Prospective = 314 mmbls lets say it's worth $1 a bbl in the ground =
.314 Billion
Put them together = $8.4 Billion in reserves or 4 Times current paper issued/assets/etc.
let's be even more conservative - say the P2 reserves are only worth $5 a bbl you still end up with over $4 Billion in value or 2 X current valuation of all debt/assets/etc.
I'm no oil and gas analyst or accountant but to me there seems to be a fair bit of value in here regardless of the current debt load. As many have said before me the proof will be in the production numbers as to whether they can last long enough or not. Given those valuations i would say there will be more than enough suitors coming in to take advantage of this situation. In time unfortunately. IMHO Loop