Problems with logical assertionsHere [and all too often] elsewhere, the problems are such that any missing element can be [and often is] detrimental to the entire edifice [including the “subterranean vault” as well].
If $1.00 label hung over SGL by TD has any merit [and when any of the “big boys” make statements like this they have the means to drive the stock there], all other supposedly positive elements of discussion [in $$ terms] effectively become null and void.
Are there positives about SGL? Sure, and they are plenty, but when the ability [and puny level of VESTED INTEREST in terms of stock ownership] of the management gets questioned, nothing looks good at all.
If SGL is indeed a candidate to be taken over, for all holders of this stock to be “happy”, per share price must be around $3.25 [this is my opinion given that no "worms in the wood" are hidden of which I don’t know]. If it is so, the sticker price for SGL would be about $720 million, debt included. Considering vast undeveloped land [the unknown in terms of reserve potential] and currently decent level of production, $720.00 million is a very reasonable price to pay. Who can or should pay it? I don’t know, but the problem is that usually no one pays 100% premium for anything [i.e. about double the price where SGL is trading now].
IMO, speculating over potential takeover is detrimental to the moral of management, employees and shareholders alike. Today, more than ever, the onus of responsibility is on management alone. To get ahead, they must: 1. Invest more of their own dough for others to believe them. 2. Double the number of experienced personnel to FOCUS on operational efficiencies to control costs and fire those who miss clearly unnecessary overruns. 3. Take risk to spend on drilling exploratory wells on lands that currently have big fat zero label in terms of what can be booked as reserves of any kind [to do it relatively painlessly, IMO, cutting the dividend [at least] in half may pay off sooner than the prospect of eventually drowning the company in debt that would wipe out almost all value down the road]. Strictly counting on persistently high commodity prices is not enough, if the costs are running out of control and / or nothing is added to the reserves.
This is my humble and totally uninformed opinion. None of the above was intended to dismiss logical assertions of others expressed on this board. One thing, however, is for sure: given that the banks are obviously tightening the noose around the neck of this company, I really don’t like decision-making abilities and / or the level of involvement of management running this pathetic show. They must show hands-on unambiguous leadership, not trickery emphasising the “best value on the block" with prospects to be sold for peanuts just to get their own rather puny initial investment back... With vast lands they now have [and potential reserves below them], prudent stewardship and relatively high commodity prices, SGL can be valued five times higher than it is valued now... or it can be driven into the ground...
PC2