GREY:STPJF - Post by User
Post by
hudson1234on Apr 26, 2014 9:40pm
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Post# 22495026
Break Even
Break EvenHey I am long on STP and have just recently been doing some research on the neccessary production numbers by the company to break even. There has been some discussion that the number is around 6500 bbl/d I was just wondering if some people in the know could help me identify if this is still the break even and if so where they got the information from.
The first issue I see is that the number has remained the same following the new debt obligation the company took on. Does anyone know what kind of production increase would be needed to support the extra interest payments, if any?
Additionally Lutes in a transcribed interview dated September 26/2012 retrieved here <https://www.shpacific.com/en/in_the_media/stp-2012-09-david-pescod-article.pdf> Indicated Mckay had to produce approx 4500-5500 bbl/day to stand on its own.
And in an old analysis by connaccord dated Feb 11/2013 retrieved here <https://research.canaccordgenuity.com/_layouts/researchnoteviewer.aspx?pubid=87724> they indicate the number to be much higher (8800 bbl/day: 4000 from Senlac and 4800 from McKay)
Obviously I realise there are many factors that affect break even, such as the strength of the U.S. dollar and increased oil prices just to name a few. I am just trying to do my own DD and wondering if someone could help me clarify the numbers.
Thanks