GREY:TBTEF - Post by User
Comment by
pm1231on Jun 26, 2014 8:58am
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Post# 22696056
RE:New holder
RE:New holderI would argue very different scenarios. Petrobakken/Lighstream had a horrible balance sheet, a crushing debt load with D/CF close to 4x...and an unsustainable total payout with DRIP (well north of 100%)....they had no choice but to sell some land and cut thier dividend to bring thier debt levels to a more reasonable (albeit still high) of 2.7 times D/CF.
Twin Butte is not facing the same challenges and have no need to sell land. Theirs is an execution issue. As they continue to execute on horizontal versus vertical drilling - they should be able to get on top of declines. The market is worried they won't be able to meet cashflow guidance with high decline rates (and Twin Butte has a history of negative revisions).....so the onus is on management to prove the market wrong - but I would argue this is a fixable problem with proper execution and appropriate allocation of captial.