Lightstream on Bankruptcy watch $0.50 Price targetThey are in the worst shape in the jr-mid caps, but LEG is not far behind. Why is nobody buying LTS Bakken assets? Why would they buy LEG then? Recent Update Text as of 19JAN15 LTS announced the elimination of its dividend and Q4 volumes, and cautioned that . it may be close to debt covenant limits by year-end. Divvy eliminated. Citing WTI prices, LTS eliminated its dividend entirely. Capex will be $95M for 1H/15, which the company expects to be cash flow neutral. Full-year guidance of $190-200M as announced Dec. 15 hasn't been officially reduced but will be monitored with oil prices during the first half. Q4 production was in line at 36.4 mboe/d. . Covenant risk. LTS cautioned that the company could approach the limits of select debt covenants prior to year-end if weak commodities persist and will attempt to renegotiate debt terms with facility lenders to avoid breaches. The main covenant in question its total debt to EBITDA (last four quarters) with a limit of 4.0x. At Q3, LTS was at 2.1x. . Sidelined. The company is in survival mode and has its cornerstone Bakken assets for sale, which we think says a lot about the current state of affairs. We forecast LTS's Bakken production at ~12,000 boe/d (15E exit) and think that the asset could fetch $0.85M-$1B (in a buyer's market). This potential transaction would improve the debt situation, but as a going concern we'd view LTS as a challenged business model, prompting our SU rating. At US$50/bbl WTI and US$3.00/ mcf Henry Hub, our $0.50 target implies a 15E EV/DACF multiple of 6.5x. . Maintain SU rating; our target price moves to $0.0.50 (prev. $1.00).