Southern Pacific Resource Corp STPJF

Want the stock down or?

[adamsight]

So although its been said the Review won't end May 30th, this does not seem to be widely known.
Shat do you think the company will release some kind of update in this regard or will they let the stock tank as the deadline comes and goes?
Your thoughts?

[ShatnersRug]

I'm of the opinion that the strategic review will be extended into at least July. The new buyer might want to see how the new ICD (#5) works relative to ICDs (#1 and #2). Lots riding on ICD #5. They're obviously not content enough with how the first two have performed. If the results for #5 are poor, I suspect that the offer might be pulled or reduced.

[Junit290]

Did they install a third ICD? I was under the impression we had stalled any further capital spending until review had reached a final decision? 

[tp0052]

Junit290, You are correct. All capital expenditures, company wide were suspended, pending the end of the strategic review process. GLTA.

[ShatnersRug]

Absolutely correct, tp. Capex suspended until Strat Rev is done with. However, there is nothing stopping the prospective buyer from fronting the cost of "ICD#5" in order to determine McKay's value in their eyes. They're already in the hole for the breakup fee, what's another million bucks to determine the final sale price? If and when that scenario does occur.

[nikehercules]

Unfortunately, ICD failure is a real possibility. We've seen multiple instances throughout the last six months (ie just prior to the November 2013 announcement & recently in the May 7th release) that hot spots and steam breakthroughs occur when the wells are run harder. What's the long term effect of having raw steam hitting the producer in sections closed off by the ICD? Both pads

[Junit290]

Herc, Your right that the ICD's could fail but they're designed for the specific reason of correcting Steam Breakthrough. From what I've read and gathered from this BB is that upon SB(steam breakthrough) the ICD cuts off vapour flow and only allows fluid into the producer well. The steam then has to find another way to get through, which is what we want because at the moment the steam

[nikehercules]

Junit: You've outlined the sunny day scenario. Fingers crossed the ICD's work, a deal is nearly done and we make some money. However, the markets have only assigned a 4.5 cent premium over early March given the initial ICD announcement and financing. Despite the ICD's, Mr. Market currently views STP as an extremely risky security. As whatabuck mentioned earlier, develop a risk

[monzie]

Well gee hercules using that kind of assessment, the market have assigned more than a hundred percent premium from when the strategic review was first announced to now (heck it was a 2 hundred per cent premium just a couple of weeks ago)- and that would include the ICD's and the financing (seeing as both would fall under company strategy to enhance shareholder value).  Or if you want a

[nikehercules]

Monzie, I have used "that kind of assessment",  clumsily traded my entire position around the news releases (in some cases causing panic in the marketplace, sorry guys about May 6th) and pulled 11 cents of risk out of my  500,000 share investment @ 0.175ish for 2014. As of yesterday, it's now 250,000 given the latest ICD AER filing earlier this month and will be at zero

[monzie]

What is it that you've lost patience in nike?  You say you sold your shares on May 6th which means you sold them for 31-32 cents a share which would give you about an 80% profit in just a couple of months.  So please enlighten us as to why someone who made 80% is losing patience with the company.   Yes the company had an issue with one of the ICD's but said the problem

[Backwardblade]

LOL!  It's called STRESS dude.  And I, for one don't blame him a bit.  

[nikehercules]

Yes, I have done ok...this year. However 2013 was a goddamned bloodbath for myself and alot of "buy and hold" types who were "patient" and believed things would eventually work out. Boy were we wrong in 2013! So for this round with STP I threw out "buy and hold" and treated this stock like a cheap phillippine hooker as someone mentioned on Dec. 11, 2013 and clawed

[monzie]

Well you've convinced me Nike.  Tomorrow morning I'm gonna short the common and buy buy buy the debentures. Good lord I truly hope I'm not the only one who sees how full of it you are.

[nikehercules]

Well well well, it seems we've touched off a little nerve here Monzie. This is going to degenerate into a good 'ol flame fest. And yes, shorting the common and going long with debs is not a bad strategy. Collect the interest off the debs. The debs are protected by a short on the common. ...and Monzie...first rule of investing: protect your capital.  Nobody else will. 07-May-2014

[monzie]

Trust me you didn't hit a nerve of any sort I just like calling people on their bullshat.  And I'm not sure why you're showing these transactions.  I don't doubt that you had and sold shares and I could care less about the amount of shares you had, what I doubt is your sincerity about why you're on here now posting that the commons are screwed and the debentures are

[Eyeinvestor]

Eye own the Debs. Much as eye would like to see more people beye the Debs....it would be a really stupid and high risk strategy to short the equity and long the Deb. That would be a totally mismatched hedge. If you used $100,000 and the company was purchased for 75 cents, you would lose $90,000....quick way to turn $100 into $10. The deb is slightly less risky than the equity....that is all.

[nikehercules]

Agreed, shorting the common at this time would be suicidal. However, if STP goes it alone the strategy may be worth visiting after the senlac refresh and McKay stabilizes at whatever level. I sure hope we don't get to that point. Eyeinvestor recommended "barbarians at the gate: the fall of RJR Nabisco" a little while ago. Sageview's mentors, KKR, are front and center in this