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Bullboard - Stock Discussion Forum Long Run Explor Ltd Ord WFREF

"Long Run Exploration Ltd is engaged in the development, exploration and production of oil and natural gas in western Canada."

GREY:WFREF - Post Discussion

Long Run Explor Ltd Ord > Not a bad plan
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Post by PUNJABI on Dec 15, 2014 10:12pm

Not a bad plan

Bit too aggressive but will most likely work.   Would have liked their WTI estimate between $55 to $60 to be on the safer side.  It is better to beat than miss.

If WTI averages at $70 for 2015 they look good with their hedges. But what if average of WTI is much lower in the range of $55 to $60. The payout ratio will be above 100 % unless they cut capex. This means lower production & lower cash flow.


LRE has a nice small float of 193 million shares. Not a good idea to start drip now & dilute it at these very low prices. It will come to haunt the stock when the oil rebounds.  I am getting the feeling the company is trying to be shareholder friendly with drip & not cut dividend for December. A  kind of Xmas present.  The shareholders have suffered a lot due to huge loss in value of the stock

Drip would most likely give a discount of 5% & no transaction cost for shareholders.  This will help the company with lowering payout ratio. I still believe they should have avoided the DRIP.

Selling package in this enviroment is not going to work. Lot stressed assets will be coming to the market at rock bottom prices.
Comment by theman0 on Dec 15, 2014 10:17pm
My understanding is that they are not looking to sell at fire sale prices. If they can't get what they feel is fair value, then they won't sell the property's. Payout ratio they say will be 21%, so I am not sure how you get the 100% even if their numbers are off somewhat.
Comment by PUNJABI on Dec 15, 2014 10:20pm
You have to add capex too.
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