GREY:WFREF - Post by User
Comment by
Reflecton Nov 27, 2015 11:03am
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Post# 24331484
RE:Opinions
RE:Opinions
The most important factor at play are oil & NG prices. Book values give a picture of the Company’s calculated relative worth & is a useful tool when situations of liquidation or bankruptcy are probable foseeable situations.
LRE has engaged Macquarie & Scotia Waterous as finanacial advisors as part of a strategic asset rationalization process of basically all of its assets (properties). This does not include debt &, share price means asolutely nothing unless a bidder feels maybe that they can get a better deal because of desperation on LRE's part; however, it is a bidding process on assets & the desire to attain these assets.
This should give a clearer picture as to the relationship between the calculated BV & what those in the markert are willing to pay for the assets. But then again; there is no serious committment by LRE to sell these properties nor do they say are & so bidding or proposals put forth may not be really serious – thus, the values can be flawed. However, there is a snapshot for consideration.
The interesting question is how will dilution affect share value. Similar to & yet different than a public share offering – LRE is “...private placement (the "Private Placement"), 125,000,000 units ("Units") at an issue price of $0.80 per Unit for gross proceeds of approximately $100 million...”
Read more at https://www.stockhouse.com/news/press-releases/2015/11/09/long-run-exploration-ltd-announces-amendments-to-proposed-private-placement-and#OY6ECKD3TTlLl6uK.99
If the deal goes through, LRE shares outstanding will be diluted however, the monies from these shares will be used to pay down debt to the tune of a 100 million & shares will be accumulated by one partner instead of many upon many individuals which can affect sp drastically & more to the point – lower sp.
How it affects LRE sp remains to be seen. LRE is basically owned by major institutions & fund companies & so dilution here (if the deal is earnest & carries through) I believe will benefit LRE share holders & increase sp but then again – oil & NG are the most important factors. With this diversity of investment (if it becomes a reality) & committment - LRE is well on the way to recovery. Remember, these institutions & fund companies have a financial stake in the success of LRE & have means, influence & access to money markets & deals.
In conclusion; to the tune of 100 million & share dilution of 125 million; I believe the deal with MIE will add share value through investor confidence. Dilution in this scenerio will benefit LRE share holders. There will be no sudden excess of trading or massive dumping if that is what you are thinking.
In any case; this is a “Catch 22” situation. HOLD. Everything seems to be so pre-mature. LRE has many options availabe but first lets see where the MIE deal goes. No matter how you cut it or look at it: LRE right now is “HOLD.” For those willing to take the risk – at these prices “BUY!”