Post by
d_trump on Nov 06, 2014 6:45pm
bought more today at 2.82
Their debt to cash flow ratio is an overhang, however their Oct presentation projects they will exit 2014 at 1.75 which would be a nice improvement (currently greater than 2x). Annualized CFPS is roughly $2 - if you trim this by 20% to account for lower prices you're at $1.60. So under $3, we are trading at less than 2x's cash flow.
So I think if they are successful in lowering the debt to cashflow to 1.75 and if oil prices stabilize around $80 or higher, the dividend is secure and a fairly signficant bounce is in order.
Comment by
bossu on Nov 07, 2014 4:04am
This is exactly was I was saying a couple of post below (at 3:45) They are forecasting a year end cash flow of $ 300 M So your debt of 718 981 M at sept 30 th give a ratio of 2,39 which should be less at year end because I d'ont know the real debt at year end,but it will be less.
Comment by
d_trump on Nov 07, 2014 9:17am
Don't disagree but I'm relying on the company's guidance that was presented in mid Oct. They claim they will exit 2014 at 1.75, so clearly they are projecting that debt will be paid down somewhat in Q4. The fact that this guidance is quite fresh (mid-Oct), it would reflect current depressed oil prices and should be quite reliable.
Comment by
Shlinker_ on Nov 07, 2014 9:25am
Someone said they had 4,000/bpd+ for sale? putting that towards debt would be a very good thing for this company and its publically traded shares. Where would one find this info? other than emailing the company?
Comment by
shambano1 on Nov 07, 2014 9:59am
not the best timing for asset sales however and I'm sure if they are forced to sell quality assets, they won't be getting top dollar. I'd rather see the dividend eliminated before they sell their high quality assets at lower metrics??? f.d. I sold my shares and right now not looking to buy back in because of their high leverage at this point of the commodity cycle. DYODD
Comment by
JohnJBond on Nov 07, 2014 11:49am
The company's own forecast regarding debt to cash flow is the number one should focus upon, as there are lots of variables. The only meaningful impact of reduced share price is that it prohibits the company from doing any paper funded acquisitions, while at the same time increasing the chance that it becomes someone else's acquistion target.
Comment by
d_trump on Nov 07, 2014 12:06pm
Excellent point JJB. Street darlings like WCP are able to do deals because they have such high multiples - anything they buy will be hugely accretive.
Comment by
UppersDowners on Nov 07, 2014 12:46pm
we are one of the worst performers in oil stocks today and that stinks. I feel like buying a bunch more now that results are out but something is holding us back. Any ideas as to why?
Comment by
barneyj44 on Nov 07, 2014 1:17pm
What's holding us back, could be guilty by association,some of our board members are ex Penn West people and they are having some accounting issues, heard something to that effect on market call from one of the guests, I'm still holding but the more we fall the more concerned I am, either that or a take over bid in the works. I have averaged down too many times and been burnt so far.
Comment by
iwpete on Nov 07, 2014 3:22pm
Barney if you overlay Sprott (SCP-T) on a LRE chart you'll see the similarity. Sprott holds a lot of LRE. And if Sprott is forced to liquidate that is a lot of supply in a down market. At $3 LRE is OK. Collect the div. And Sprott is a player, so God only knows what they do with derivatives in relation to LRE
Comment by
patenright on Nov 07, 2014 3:23pm
Back over 3 weeee just another 3 dollars to go
Comment by
JohnJBond on Nov 07, 2014 3:37pm
Hopefully it will fall back to a new low by the end of next week so I can get the best bang possible for my dividend when i reinvest those dividends in additional LRE.
Comment by
johnathamilton on Nov 10, 2014 4:02pm
Looks like you might get your wish!
Comment by
JohnJBond on Nov 12, 2014 2:00pm
The more I wish for the share price to go lower, the more it keeps trying to push up!
Comment by
barneyj44 on Nov 13, 2014 10:50am
Lower we go, be carefull what you wish for John, averaging down doesn't work with long run, not for me anyways.
Comment by
iwpete on Nov 13, 2014 11:46am
Sprott (SCP) just reported, think it was a 10 cent loss. In their report they show that they own $103,270,000 LRE. At $3 that's about 34 million shares. They only used to own 20 million. They must have averaged down too. I still haven't bought any more. Can't use margin anyway. Good Luck to all.
Comment by
ppp on Nov 13, 2014 12:32pm
When sprott reported on sept 30 LRE was at 4.50. looks like they still have the same amount of shares.
Comment by
iwpete on Nov 13, 2014 12:52pm
Looks like you're right, just talked to the TD, SCP owns 11.9% of LRE. that's about 23 million shares.
Comment by
STE15165 on Nov 15, 2014 4:58pm
Last week it cracked 3 dollars at different points in time. As tax loss season nears an end and oil holds a value in the mid seventies I believe we'll settle between $3.20-$3.40. Accumulate because oil seems to stay high longer than the lows in its cyclical patterns. There won't be to many opportunities to get a 15% yield like this in a mid tiered company.
Comment by
99999gold on Nov 18, 2014 2:47pm
This 14-15% yield - what is everyone thoughts on its sustainability if oil price is below 80? how concern are you all with the debt being at 718m? I asked because in most cases, the dividend will have to go first to pay down debt.