GREY:WFREF - Post by User
Post by
PUNJABIon Dec 15, 2014 10:12pm
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Post# 23233889
Not a bad plan
Not a bad planBit too aggressive but will most likely work. Would have liked their WTI estimate between $55 to $60 to be on the safer side. It is better to beat than miss.
If WTI averages at $70 for 2015 they look good with their hedges. But what if average of WTI is much lower in the range of $55 to $60. The payout ratio will be above 100 % unless they cut capex. This means lower production & lower cash flow.
LRE has a nice small float of 193 million shares. Not a good idea to start drip now & dilute it at these very low prices. It will come to haunt the stock when the oil rebounds. I am getting the feeling the company is trying to be shareholder friendly with drip & not cut dividend for December. A kind of Xmas present. The shareholders have suffered a lot due to huge loss in value of the stock
Drip would most likely give a discount of 5% & no transaction cost for shareholders. This will help the company with lowering payout ratio. I still believe they should have avoided the DRIP.
Selling package in this enviroment is not going to work. Lot stressed assets will be coming to the market at rock bottom prices.