RE:RE:RE:RE:RE:RE:Should CJ Be Interested In GXE?I hear ya Pottsy and I am sure that the major investor would be consulted before an offer is made and of course all shareholders would get a vote before an acquisition went forward.
As for GXE imploding it would be prudent to examine if they actually are so as not to pass up a deal.
With GXE cutting the div it sure didn't look good but even EN said on BNN Friday that he thought the cut was premature as his fund thought their div was covered.
Looking at GXE's monthly report they made $1.6 MM in FCF and managed to pay down $300K in debt. Of course that is with a $.005 monthly div (cut from $.01). All that at $81 WTIto
Every $10 rise in WTI appears to generate $600k more in GXE FCF as shown by the difference between June 23 $70 WTI minus Aug 23 $81 WTI (FFO - Expenditures)
With WTI hovering near $91 we can expect another $600k in FCF for September for a total of $2.2MM which after paying $1.3MM in dividends should mean another 900k paid down in debt.
With all due respect I am not really seeing an implosion here rather they are going to gain steam and be worth more moving forward as paying down debt reduces costs and production is forecasted by them in the September montly report to rise.
I will say at $.01 per share and 262.1 million outstanding GXE shares $2.621 MM was too high a payout and even at $91 WTI $2.2 MM FCF was not and is not going to cover it even at $91 WTI.
But...CJ only has 158.51 million outstanding shares and at $.01 per share that would come to $1.5851 MM in payout leaving over $600k in excess FCF per month to pay debt without any production increases, efficencies or synergies added.
So CJ could gobble them up for cash or shares and come out ahead and shareholder get that 1 cent divy increase per month. Which way and for how much?
I am not sure if GXE is worth it or not but I don't think they will get cheaper moving forward and I was under the impression that CJ needed to add reserves and I don't think anybody is getting cheaper moving forward but GXE is for sale.
GLTY and all
Pottsy wrote: All acquisitions have issues, hidden ghosts, Cj is doing well. Current major investors may not like the risks causing changes in a stable management. It's too small to risk buying a company that is imploding. Just my take. P