STOCKWATCH ARTICAL for LEGACY !
Another Saskatchewan producer, Trent Yanko's
Legacy Oil + Gas Ltd. (
LEG), lost 24 cents to $1.85 on 9.03 million shares. As mentioned in Monday's Energy Summary, the company has tripled its usual daily volume this past month, driving its cheerleaders into a frenzy of takeover speculation. Its next update, however, is more likely to be a reduction to its 2015 plans. The company has posted its February corporate presentation on its website. In bold letters, it says there are "Additional capital deferrals/cuts under review" for the 2015 guidance, which currently calls for $238-million in spending (mainly in Saskatchewan, with a bit in Alberta) and average production of 24,500 barrels of oil equivalent a day. That guidance was released in mid-December and assumed $65 (U.S.) WTI. Legacy will likely lower it given the drop in oil prices, as well as its heavy net debt, which was $850-million as of Dec. 31. Another $175-million in debt is available. Legacy says it is in "proactive dialogue" with its lenders, and adds that WTI would have to average $52 (U.S.) for all of 2015 before debt covenants would be breached in the first quarter of 2016. It also says it is working to tidy up its balance sheet through asset sales. In particular, a sale of the Elmworth Dunvegan asset in Alberta is "pending." Legacy acquired this 1,000-barrel-a-day property in July when it bought Corinthian Exploration for its assets in North Dakota. It immediately announced plans to sell Elmworth. Analysts were initially predicting sale proceeds of $50-million, but that does not seem quite as likely these days.