RE: RE: RE: Take out The bank has all their numbers. The bank subsequently raised their debt limit. The bank is onside and knows what they are doing and what thier strategy was. They are not in breach now and they will not need equity given their improving netbacks and higher production now. Of course you should not run above the covenants but you discuss this with your lender and they understand what you are doing and then they waive the covenant. Meanwhile they increased their borrowing capacity. The lenders in this industry understand the metrics and the pitfalls and are quite sophisticated given all the lending they do to this industry and small cap players like EE.
If oil goes to where you say these guys are still economical as opposed to the tar sands which would be much more probematic. Everything goes down in price though at $70 per bbl and these guys are survivors as opposed to some with gas and oil in their portfolios which would suffer much more.
So if you beleive in $70 bbl don't buy any oil and gas company. The covenant issue is history and they have the land and siesmic now so time will tell if was worth it.