Post by
firstworld on Jan 16, 2024 12:01pm
Decling Production
The facts are clear to anyone who can do basic math.
Spent $250M to maintain 19K bbl day down from 22+ bbl day on close Production down nearly 5% since last QTR.
Backout the 50M cash they came with on close plus the emergemcy $20M raises diluting SH 20% weeka after SG stated "non dilutive".
Thsy have earned $80 M after 2 years of production and preclose production entitlements in a time frame of $85+ Brent for $5.70 bbl pretax profit or 2.30 bbl after tax earning which horrible margin nothing left for SH.
If they want to iinrease production they will need $40M deposit for remediation bond increase and additional $200-400M to advance pay additional rigs or back LC, plus another 50- 100M capex for additional infrastructure etc.
Thay look like a drowing person trading water, especially now that oil is $10-15 bbl lower than last ywo years meaning they will lose 8-12 or $15-20M QTR loss depleting the cash to original $50M by Q2 2025 at the latest assuming oil stays above $75.
Great swing trades subsub junk status as investment. They may get a one off tax restructuring that will keep them alice until 2026 assuming forthrike doent collapse along with oil prices.
Comment by
firstworld on Jan 16, 2024 4:31pm
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