Long Run Explor Ltd Ord WFREF

RE:RE:Caution

[99999gold]

JohnJBond wrote: Lets be clear here.    If LRE gets cost to a debt covenance limit, they will have to cut their dividend.

Cutting the dividend gives the debt holders $84 million per year more security!

84 million will be pretty close to what it takes to replace the lost revenue from reduced oil revenue (if prices stay low for a year). 

That means cutting the dividend will remove the financial consequences of reduced oil revenue.

That means no risk of financial distress.

All North American oil/gas companies will be reducing their drilling budget in 2015 - that means rapid declining production will likely not be replaced - both oil and gas.

That means much higher oil and gas prices down the road.

As far as the price of oil, we saw heavy margin selling following the OPEC meeting last week.   Today was what happens when margin selling is over.

I suspect there was a lot of LRE margin selling today - its the first time its been under $2, and therefore not margin eligible anywhere.    After a day or two, that margin selling will be over - then lets see what happens to the share price.

yes that 84m helps but its doesn't quite get them there. They'll need some sort of cushion here, I suspect an equity raise coming and its looking like 1.50 and surely disposition of assets that will be tough to do - pennies on the dollar, and restructuring of their debts - hopefully its not like mafia style debt financing. 

as for todays' action on the stock - american MMs went to work and dumped oil companies plain and simple. 

If you ask me if all the above occurs where the stock will be at 80-90 oil? $1-1.25