RE:The shirts are working the presses hardshambano1 wrote: But what they do if an offer or jv comes along faster than they have anticipated?? Takeover news will be in the news tomorrow with rumirs of unsolicited deal for Apache. It would appear that unsolicited deals are getting popular, first with SU takeover offer for COS, and now rumours for Apache. This is the lull before the takeover storm and I wouldn't be caught dead shorting down but not out energy names, with good assets and low debt. I agree q3 was bad from financial POV but otherwise assets are performing above expectations and getting more efficient, so longer run things look good. Short away but be careful, a takeover could go up quite fast, in the 2's but closer to 3. Just my opinion dyodd
Q3 might look bad on the surface, but if you put it in prospective and peel back the onion on the financials it looks quite stellar. Earnings came in at (0.9) a share or (38.241) million. That missed estimates by some 30%, so that makes Q3 look bad. That's about 5% of cash on hand or about 7.5% of market cap. No immediate financial issues here.
To put that in to prospective let's look at Meg. In Q3 Meg lost a staggering (427.5) million or (1.90) a share. That missed estimates by some 25%. That's about 117% of cash on hand or about 17% of market cap. Going forward Meg needs to be either bought out, a higher commodity price, or they need to do some serious restructuring (sell pipe line etc)and they need to do it quick.
Now if we peel back the onion on ATH Q3 financials we'll see some interesting things. Hangingstone came in at a loss of ($73.67) a barrel. Light oil came in at a profit of $12.88 a barrel. So why did Hangingstone lose so much? Hangingstone was only operating at 18% capacity, by the end of next year it will be operating at 100%, erasing that loss. That's $12 million a quarter that will be saved with no restructuring. The G&A expenses are hard to put a number on as they seem pretty low already in Q3. There was restructuring costs of $1.6 million. There was also $18.5 million depreciation. If you were to add those up it would equal $32.1 million, leaving a loss of $6.1 million. I also expect at least another $3.5 million a quarter in light oil profit next year (assuming netback is the same).
If we take out the income tax loss credit of $13.5 million. That leaves a 16 million loss. 14.6 million of that being debt interest repayment. That's without any further restructuring. A crude price of $60 would put ATH well in the black by Q4 2016.