Kicking Horse Energy Inc. V.CEX

Very high debt level

[Valueinvestor9]

Thanks to the previous post on reserve booking. I looked at the reserves booked on Kakawa (65%).  I then began to look at the ability of the company to fund the future drilling.  My understanding is that the company is into its credit line approximately $55 million on a $70 million line. Way to high.  Look at what is happening to Delphi because of high debt levels.  The inability to access capital should require a notice to shareholders on drilling plans.  

With the revenue stream declining due to reduced commodity prices the line of credit may come under review. 

There is discussion on the street the company may need a financing.  That could have been the reason for the run up in the stock.  Why you ask.  The company goes out and markets to raise interest in the story and then hopefully lifts the stock price.  Looks like they may have missed the timing on the financing.  The window is closed on this opportunity at this time. This company has very little institutional ownership and would have to rely on retail support. In this market unlikely to occur. 

What about a partner.  What about Questerre?  The first question I have is whether Questerre is funding their portion of drilling or are they in penalty?   This is marterial as investors should know the status of this relationship.  The real issue is if the company has to fund the wells 100%   In a good market maybe but at this time that may be challenging. This applies to the pooled lands. 

What are the economics of the wells in this environment.  Investors need to be told what the IRR is now.  What is the recycle ratio and NPV.  If the numbers are challenged investors need to be told because this goes to the ability to sustain the line of credit and ability to raise capital.  Can the company sustain its capital program.  

I am beginning to look at drilling economics and overheads. This week I am going to look into well costs and well performance.   I love reading MD&A's and financial statements.  

Stay tuned.   To the poster who commented about the other poster not contributing.  I plan to contribute a great deal.  I hope other investors also review this company's information.  It would be helpful if we can get any presentations that they are using that are being used on road shows.

[yyzhouse]

great and informative post! have been wondering about this company for a while but your post tells me i should look elsewhere at the moment. In this market debt levels will have to be watched very carefully as when the reserve engineers begin to write down reserves companies will begin to get hammered on their reserve based lending facilities. I have been looking for co's with minimal if any

[righand2]

Valueinvestor, I like your alias, as it makes it seem like you are seriously looking for good investments, while it is clear you are here just to bash the company and try to raise doubts in the minds of shareholders. What your motivation is I have no idea. Maybe you are one of the aholes who sued Donnybrook and are looking for revenge? You post a bunch of questions, even asking about company

[huntergatherer1]

Righand2 - while I agree there is some drivel on the boards here and there - these posters - who ever they are bring up legit points - the presentation I see is from a month ago but shows debt as of last q - not current. These boards are to raise questions and answer them - let's have an open debate to the merits of these investments - and maybe we can find the winners - this may or not be

[righand2]

I am all open debate, but also know a scumbag when I see one start posting. This Valueinvestor clown raises questions that should be asked of an energy stock, but why does he ignore the fact that all of his questions could be easily answered by simply looking at the presentation? Easy answer, he is trying to raise doubts in the minds of the shareholders who aren't exerienced enough to know a

[Valueinvestor9]

Well, that was an interesting response.  No answers to the questions the board is asking.  My sense this is an IR guy or someone who does not want to face the truth. Mr. Righthand seems to be more focused on attacking the people asking the questions than focusing on finding the answers.   Legitimate Concerns.   Debt, if Kicking Horse has $55,000,000 in debt they are going