Nuttal on LEG2014-03-11
Executed quarter after quarter after quarter, beat expectations, yet nobody cared. His hope is that there are 2 underlying catalysts that could make people care. The reserve report they issued last week was very, very good and highlighted just how profitable that these barrels are that they are producing. It is costing them on average just over $20 to find a barrel, and at the end of the day, when you take off royalties and operating costs, they are net backing about $60. Their historical production growth rate has not been quite high enough to get people excited. He believes they are currently seeking to bring in a joint venture drilling partner on part of their acreage. His guess is that they are exploring the sale of some of their production to raise cash to pay down their debt to bring down their debt to cash flow targeting a 1X multiple. This could create more interest.