Long Run Explor Ltd Ord WFREF

The Absolute Lack of Fundamental Legs

[perdikaoilgas]

It is only sentiment that drives the slump of the oil price which has not any fundamental legs, according to this Editor's Pick analysis from Seeking Alpha below:

Editor's Pick from Seeking Alpha: Sentiment and no fundamental legs drive this slump

[johnathamilton]

Here are the key paragraphs from the Seeking Alpha article: "After all, how can the investors weather this temporary storm and benefit from this oil price shock? Well, big fortunes will be made to those with the patience and foresight to pick right and hold tight. Just pick quality oil stocks with low key metrics (i.e. EV/EBITDA, EV/Production, EV/Reserves), sit tight, and you are going to

[99999gold]

stay afar from heavily indebted companies is THE key statement, big money are going to those with at best 1x debt to cash flow first. It's all about cash flow these days with commodity companies. second you have to be buying (in multiple blocks) at these levels if you believe that long run will succeed, most are likely afraid to but if you have conviction and belief that it will (if you

[lantren]

nobody believes the mass medias 'glut' hypothesis , there is no way we should be suffering like this body{zoom:175%!important;}

[ppp]

So how bad are we really suffering. Are we going hungry? most likely not. Don't get me wrong it sucks to lose money. But is this money lost forever? I don't think so. Is LRE going BK in the next while No.    Is oil going down somemore? most likely.  Will oil stay low for ever? No!! Will we get our money back most likely. When everyone says the sky is falling chances are its

[JohnJBond]

When looking at debt on a relative basis its useful to compare debt to cashflow ratios with comparables. However when looking at debt from the potential for financail distress you need to look at internal ratios like cash flow to interest etc. As I write this I do not have LRE's annual interest expense before me, but using 700 million debt and 6% interest, the interest is 40 somthing million

[qwqw]

I looked at Trilogy's Q3.They had no O&G hedges for 2015 ???????  COS also had no hedges.

[ppp]

And their EV value is  still 2 times ours. Every last company will eliminate their div. going forward.

[JohnJBond]

I don`t follow Trilogy as I consider it to be similar to LRE at several times the cost (I like to buy cheap stocks, and avoid the expensive options). We are just starting to see the published capex reductions for 2015.    Its starting to be clear we will see billions, and probably 10`s of billions in reduced drilling in North America.     This will clip US oil production......

[johnathamilton]

I read in another article (sorry I can't remember the reference) that the Saudi's were looking for N.A. to cut oil production by 500,000 BPD in order to help relieve the oversupply. If N.A. cut by 500,000 then OPEC would cut by 1.5M BPD.

[JohnJBond]

When you look at the global supply and demand numbers, they are very close on an annual basis.   About 200,000 boe per day more supply than demand (most recent historic numbers).     As demand is seasonal, the seasonal demand is at times about 1 millon boe below supply, and at other times, more than supply. N.A. doesn`t have an autocratic production advance or cut procedure.  

[johnathamilton]

Thanks for a great answer JJB - What I was really inferring was that with the drop in price there will probably be a drop in oil production in N.A. as the higher cost production is taken off-line until prices move up again. As for the source, I believe it was Bloomberg.

[PUNJABI]

As earning comes down so will the liine of credit. They have lot of cashflow to pay interest. Under convertible debt the company has to issue shares at the conversion rate of $7.40 per share. They do not have to pay cash. The debt holder are under water big time. As the share price tanks LRE.DB tank too. They are trading at $75. FROM MD & A of LRE Credit Facilities At December 31, 2013

[JohnJBond]

Thanks for sharing. A quick read shows the credit line borrowing can not exceed 3.5X cash flow (on a trailing basis). The most recent stress test cash flow estimate for 2015 was 1.58 per share or about 316 million. It seems very unlikely cash flow could decline down to a 3.5X ratio. The interest coverage seems to be of no concern.

[maurizion]

The share price seems to indicate someone is concerned about something.

[99999gold]

that's understatement...

[madmax1970]

how can someone be concerned about something? oil stocks are all going down the sink! why should there be an exception here? besides speculate to feel good, we know nothing! this is a market of buyers and sellers. oil stock are unactractive right now.

[99999gold]

hate to point out the obvious to you now but I told you that last week or two weeks ago - did you listen madmax?  such a shame.  .88 is looking good - anyone know why .88? think east. 

[madmax1970]

hey 99999gold... weren't you suppose to be out of here and stop with you stupid comments? mister 20+ years of 0 experience?

[99999gold]

hey madmax? you doing okay? yeah - think about what you'll say to your wife or whomever you need to tell... use a thesaurus and make it sound good. good luck.

[madmax1970]

99999gold I still think your comments are useless...  just like you... single idiot living in moms basement, eating kraft krap... grow some balls and honor your word. GET OUT!

[roge1]

9999999gold is a useless trailor park trash - put him on ignore

[99999gold]

ignore away but do so at your peril, this debacle was not unforeseen. Just go back to my posts I implore to save your money, if you like it at 1.42 you'll love it at 1 heck .75c didn't I said that at 3? oh well, hope someone listen, I also said that retail just like most here are compeletely clueless and always the last to act... I do take offense to your trailer (if you're going to

[Piperdown]

I listened 99999gold. Thank you. I had the balls to sell with 7% losses in three days of owning this sucker, and I think too many people don't know how to hit the sell button. Never be afraid to get out of a lossing trade and profits are not a bad word. Don't be afraid to take profits when they present themselves. Too many times profits are there and we get greedy, thinking sp is

[99999gold]

that's funny, because you're actually the one holding this coal so it makes sense that I'll be the one eating kraft dinner and living in my mom's basement. hmmm, makes sense I guess.  grow some balls and honour my word? how about you grow brain? 

[JohnJBond]

Babies are getting tossed out with the bath water. Those who might be concerned include. 1.   Those with concentrated Oil and Gas portfolios who use margin.     Many of those types are probably having to respond to margin calls and have to decide what within their portfolio to sell.    Its a bad place to be.     It repeats over and over as the price falls. 2.

[99999gold]

I told you so, don't need to be prominent - just knew it was the next series of steps and warned of it - go back to my comments, I dare you say that it what I said it would are incorrect that is happening before your eyes. You guys wanted some sort of "insider" info/thinking -  I gave you guys a preview weeks ago and its right before your eyes - can't believe it? then

[99999gold]

punjabi -  I'm glad you read the MDA and understand its contents, few people here even know what it is or even know what all that info is.  The issue no matter how you word is sentiment.

[Shlinker_]

perdikilloilgas, plagues this stock house board now too. Get ready for the repeat of information for months straight. Was hoping to keep this board clean.