RE:BTE on its ownTo simplify all that... debt is not an issue here. I think that's a fair assessment given oil will likely remain in the $65-$75 range.
orlandofl wrote:
as of today - $3.29 USD, Mkt cap without RRX - $780M, EV 2.1B, 236m shares
Schwab rating went up - rated an A stock = strong buy and 4 out of 100 - very high
so, we'll see - all depends on oil prices
they estimated free cash flow of over $400M with RRX at $60 oil
they need to pay down on the $1.4B in debt - at current oil prices say $67 - free cash flow with RRX for 2019 would be around $580M
they could come out of 2019 with ony $800M in debt or less and if they wanted to part with some assets wipe out debt completely - that is at around $67 oil
the following year there would be less interest paid on debt
more barrels per day - estimated to be up over 5%
over 100K barrels a day of production
around 550M shares
at a valuation of 30K per flowing barrel you would get $3B - less debt or $800M - you get $2.2B divided by 550M shares = $5.45 / share
at 45K per flowing barrel you would get $4.5B - less debt of 800M = $3.7B divided by 550M shares = $6.72
It would not be unreasonalbe to value this higher than 45K per flowing barrel - I think that 60K per flowing barrel would be very reasonable and that would value this at $9.45
so I think by the end of next year we could see anywhere between $5.45 and $9.45 USD at $67 per barrel - if oil gets into the mid 70's than I think we would be looking at the higher end and debt would be a whole lot lower - if oil averaged $72 next year you would increase cash flow by about $150M - could reduce debt all the way down to $650M
at current oil prices it certainly looks like they could wipe out debt by the end of 2020