Post by
qwqw on May 28, 2015 11:42am
a Legacy of failure
Take a company with 40% decline rates,high debt levels including $200 mil in US $, next to no
hedges (are they insane?) and now factor in a low oil price. Houston we have a problem.
Their options were extremely limited,sell it or watch it wither away.
Is LRE in the same predicament? Thanks to a lower decline rate (30%),lower debt levels and
good hedges, LRE is in decent shape.While LEG was piling on the debt,LRE's is shrinking
(expected drop of $35 mil for Q2).
LRE is in much better shape to weather the storm.
Comment by
qwqw on May 28, 2015 10:34pm
Another company with too much debt and very little oil hedges was Penn West.They went one step further on the brainiac scale than LEG and decided why hedge at $100 when you can hedge at $50. For Q2 they hedged 15000 bopd at $50 and for Q3 at $52. The chairman from Penn just happens to be the old man from the head of Front Four.