Lightstream Resources Ltd. LSTMF

RE:thar she blows, 7.04 alltime, all time low congratulations

[naeden99]

Can we get one thing clear - management can only control operations, not what the market does.  If you want to complain about something that management did, please make it an operational issue.   If you think the stock market is all knowing, then you should probably just buy an index fund.

My thoughts on the OPERATIONAL aspects of the press release (if anyone wants to discuss how the company is performing instead of the vagueries of the stock market):

1) Yes, gas was higher than expected, by about 900 boe/day.  However, they only drilled 28 wells last quarter and brought on 20.  Based on bringing on that many wells,  I would have expected production of around 44,600 BOE/day (at ~82% oil).  So most of the incremental gas is actually extra production.

2)  They only brought on 20 wells and grew production (not q/q, but they were at 44,000 boe at the start of July and finished with an average of 45,100, so they probably ended the quarter near 46,000).    This is rather incredible performance and likely has to do with their bakken optimizations.   

3) Cash flow will be in the range of $185 mm.  They probably spent ~$120 mm in capex, but got the benefit of only 70% of that (since 30% of the wells they drilled weren't brought on this quarter).   They also sold land worth ~$40 mm.  They should pay down debt substantially this quarter. 

4) This is actually a solid quarter from a sustainability perspective.  They grew production and spent very little capex.  They indicate that their first option to improve financial metrics is to modulate capital expenditures.  If they just did what they did this quarter repeatedly, they would have great metrics.   I contend that a lot of the company's issues with leverage come from overspending on capital for future growth - which gets lumped into the current pay-out ratio.

Anyone care to have a rational discussion on these points? Or should we just keep talking about what the market is doing / complaining about management for managing the business instead of the market?