GREY:VFGGF - Post by User
Comment by
kisstopherpon Jan 24, 2014 11:26am
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Post# 22130111
RE:dead money
RE:dead moneyIamwcw wrote:
With further production declines coming in Q1, since no new flush production to boost it, and come May another credit review...oh oh. For sure the credit line will be reduced since 2000 bopd will not support the present limit, more so when production is declining. There will be no spending going forward since they have to pay debt down. No reason to own the pig. No drilling, declining production, bad news from water floods, debt issues....can you think of any worse situation? To own this pig right now is plain stupid.
I agree it's likely dead money until they sell - May 2014 we will hear the 'strategic alternatives' N/R after the banks decide it's time to pull the plug.
Why not put yourself up for sale BEFORE your really desperate? Negiote with more leverage.
Question is who will buy it and for how much.
Penn West won't miss an oppurtunity to buy distressed strategic assests in my view. Bigger scale brings greater efficiency and bigger companies get bigger premiums.