Saturn Oil & Gas Inc. T.SOIL

Debt reduction and conf call BS

[downtozero]

I wish they were more open and honest when talking finances. At the conf call, someone brought up the question of whether they were counting on the warrants to meet their debt reduction numbers and they answered with a "NO". It's easy to see if they only make $130M FCF per year and they plan on paying off $460M by Q2 26, they either need the warrant money or they'll need to do another significant bought deal. Saying they don't need the warrants to make their debt targets is BS.

They had a good quarter and great year, no need for this BS.

[kkkrrr]

no, they don't need the warrants .. why? they payed 80 million USD +++ interests in 2023 ... with debt going down the interest payments coll come down significantly and this savings will fill the gap ... at all it makes no big difference as long WTI stays around 80$/barrel ...   i can live with a debt repayment late 2026 or early 2027 ...makes no difference for me...  important

[VeritasVern]

Don't the warrants have a strike price of $4 we are currently at $2.48 a difference of $1.52 just to get to the exercise price? In 2023 they repaid $152 million in principal.  At any rate their corporate guidance for 2024 said this based on $75 oil: 2024 DEBT REDUCTION PROGRAM During 2023, Saturn repaid approximately $152 million in principal payments to its senior term loan (the

[geezer21]

There is good debt if it is earning more than what it costs.  If there is a place to put the banks money to work at a profit over the term rate you likely should keep that debt,  however, if you have no other place to deploy free cash flow than it can be prudent to pay the debt down and have that free cash flow earning what it saves in debt servicing costs.

[VeritasVern]

Their guidance has them paying off the debt of $463 million in about two years at $75 WTI. They claim that for every $5 above $75 they estimate they will earn an additional $15 million FFF. So at $85 oil they will generate an additional $30 million and at $95 oil $60 million available to pay down the debt faster. Saturn is situating themselves to be bought out and/or merged with another big player

[downtozero]

Yes, they could make it (barely) at $95 oil without further dilution, but that's not their guidance. 461M end of 2023. 180M paid off in 2024 = $281M remaining. 130M FCF applied to debt in 2025 @$75 oil = 151 remaining $65 FCF (2 quarters) applied to debt in 2026 @ $75 oil = $86M remaing (debt target not achieved). $95 oil for 2025/ 1H 2026 adds $90M FCF so debt can be paid off. Either they

[VeritasVern]

Correct, I did say guidance had debt repayment based on $75 oil but that they also added that for every $5 increase adds $15 million to debt repayment. I just threw in possible scenarios if oil was to be $85-95 hypothetically. At any rate if they get to $50-85 M remaining in debt by end of Q1 2026,which is not much, I'm not sure if its warranted to hold a gun to their heads. The point is that

[Kpitreal]

NAV vaalue of the assets is around $16.00. Company is out of favour because of the debt levels as you said. With the debt coming down the share value will go up. Analysts avg tagert is $5.25 for 1 yr out. $5.00 to $10.00 in 2 years and $15.00 in 3 ? possible imo

[Rainyday]

Solid accumulation is taking place - for the reasons you said.