Parallel Energy Trust T.PLT.DB

RE:RE:RE:RE:RE:Kherson does it again

[bill_29]

TheCapitalist wrote: Definitely. 

I'm long PLT, but the reality is that they're incredibly speculative at this point (which is why they compose less than 2% of my portfolio).

The major concerns I have with them are their current debt ($11 mil in accounts payable) compared to their available cash. I have no idea how they're going to manage to pay that down with no real cash in the bank. I suppose if it comes down to it they could sell fixed assets.

Another concern is whether or not their revolving facility will be converted in to a term loan. Should that happen they'll only have a year to pay off the entire $156 mil. Not a good scenario.

Precisely. I'm also long Parallel, but what has happened is that Parallel has painted itself into a very tight corner with almost no wiggle room. Compare this situation with Eagle Energy Trust (EGL.UN), another SIFT which has run into trouble due to the falling price of oil. Although their stock price has suffered significantly as well, at least Eagle's management had the foresight to ensure they had options. Parallel basically sat by and let the wave hit without making any real effort to move out of the way. Although their capital investments may be worthwhile, the fact is that they are in real jeopardy of losing them due to poor planning and execution.

By the way, I am not particularly partial to Eagle; just acknowledging credible management effort when I see it.