RE:RE:RE:Cuts : Capex 22 % Div 37.50 % DRIP goneocean112 wrote:
They are well positioned to pick up LTS assets for pennies on the dollar (lol)...
That is really funny. How is TBE positioned to buy a much bigger company?
I do not think that you understand that TBE has gone into survival mode. This is the right move. . I like that fact with $60 WTI projection they are adapting fast. There are some that are still projecting their budget at $70 & have their heads in the sand. Oil correction has just completed the first phase.
The bounce that you see today is not related to TBE it is a market reaction, short covering, bargain hunting that have been waiting to get in etc. It could be a dead cat bounce if oil continues to drop.
TBE is lucky that they have hedges it gives them some time. Once the hedges are gone & if the oil stays at the present prices for a year or two then things for TBE will get ugly along with all leveraged companies. A phase of cut in lines of credits will come.
Cash flow or all companies will drop. The Debt to cash flow of all companies will go up. It affects their borrowing power, ability to fund capex & dividend. Production will collapse. Companies with bigger debt & high decline rates are more vulnerable. LTS has big debt & decline rate. The only thing going for them it that their netbacks are one of the best.
It is a very different class of Oil companies with much deeper pocket which are capable of pick up distressed assets.