RE:Keep Focused on the Improved Oil PricePetroExplorer wrote: Don't let silence break your spirits: receiverships can drag on, and on. Companies with cashflow, can attract more attention from various buyers, so it takes time to sort out various proposals.
Price comparisons for Western Canada Select Crude Oil:
Current: $50.46
One Year Ago: $32.21
Q1 2016 Ave: $26.34
Q1 2015 Ave: $42.78
Higher oil prices, will make alot of difference. The longer this drags out, the better for shareholders, as the banks recover more money, from cashflow. Eventually, the outstanding debt will become smaller, and perhaps within range of what the assets could support, that a bank would be willing to lend to.
From January 5th data:
Current Price: $51.23
One year ago: $30.75
That is a $20.48 difference in price. The current prices are trending higher, while last years prices were trending down at this time which caused the Q1 negative cashflow, for TBE.
It looks like there is reduced supply of heavier crude from foreign countries, as someone suggested might happen, that may be causing this improved WCS price. We'll have to see how well this holds up, but TBE definitely has some extra cash coming in, that can be used to pay down debt.
There could be so many permutations of possible business combinations, that time is needed, to decide what to do. Here is what I think should happen, for shareholders to see value:
1. Continue to pay down bank debt, to some more comfortable level, out of operating cashflow.
2. Come to some forbearance agreement with debenture holders, that back-interest owed, will get paid, and there still is value in the debentures. Some extra warrants should be issued, as compensation to debenture holders, for helping the company through this difficult time. Otherwise, convert the debentures to shares, but that dilutes shareholders.
3. Arrange for a preferred share issue, to take off bank debt, further reducing it to something manageable that the banks can live with. Preferred shares will get a dividend, and rank above common shares. (Ironically, debentures are supposed to rank above preferred shares, in the financial pecking order, not this stink-bid game that was played out, in June.)
Possible ways to save everyone's investments. Getting new investment becomes easier, in a higher oil price environment, where companies can actually make money.