RE:RE:BNN - Today 4:20 EST - Paul ColborneI agree with your assessment.
The firm has managed to remain in a position of "relative" strength but its superior asset base. Low decline, high payback wells means that they should not need to go back to the markets for more capital....unless they want to buy excellent acreage nearby existing operations. I would be happy if they can do that at a low cost.
Yes, their EV is still high (north of $1Bn) but there is a reason they have been trading at a premium.
Look at the press release of these guys relative to say LTS. Day and night. The operations at SGY just keep on improving. With production costs at $14,000 boedpd at one of their key fields, it is hard to argue that your E&P dollars should not go to them.
Now we can still argue about the whole sector. I am more worried about NG than oil at this point, but both are down hard and might languish for a while. Although the number of drilling rigs dropping is so steep that I cannot believe we won't see an effect on production by H2. Nobody (except consumers) are happy about low oil prices. But the market had to readjust itself and the readjustment has been rapid and more brutal than anyone expected.
Even firms like EOG were barely hedged going into 2015. This was an extreme event that very few were prepared for. Relatively speaking SGY was well prepared.
It has a high debt level but it still has $155M on their facility. They are still paying a lot out in dividends (which they could cut).
Again, relative to its peers, I believe they are in much better shape.