GREY:LSTMF - Post by User
Comment by
JohnDDon Oct 10, 2013 11:42pm
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Post# 21809185
RE:RE:So .. this is how it works
RE:RE:So .. this is how it works
Nice sleuthing Itrabs...Well if they have sold additional assets in SE Sask above the $38 million sale with heard about in the last Q, that is good news.
Clearly the company is facing tough choices and asset sales are the best option in my view to reduce debt. The company has hit the wall on debt levels and that likely explains why they were unable to pick up Trioil even though a sale was announced at a very attractive price for the buyer. I suspect that pained John not to be able to pick that up. That said, it's not over yet and who knows we may still end up with assets from that company??
Looks like the Cardium is ending up much gassier than originally expected. A jump from 18% gas to 22%for the entire production base over just one quarter suggests a huge increase in the Cardium gas oil ratio. This could in large part explain the $25 million facility cost overruns we heard about in the last Q. The fact that they deferred 18 wells in Cardium may be consistent with avoiding more high facility costs in that area due to high GOR #s.
2014 guidance for the Cardium will be interesting. I would not be surprised to see a shift away from that area to other areas in 2014.I am not talking about a huge change but just a shift in direction.
Feels like deja vu...we were in a similar mess in 2011. Hopefully once the company fixes the debt levels this time they will make it a priority to maintain a strong balance sheet instead of spending available liquity on purchasing more real estate and drilling wells. If we had a stronger balance sheet we could have executed our NCIB and picked up some shares at attractive prices - and help support the share price during periods like this.
John