Post by
JohnJBond on Feb 19, 2015 12:38am
Feb Presentation
A few things stand out in the Feb presentation.
1. Q4 forecast average prodution 36500boe/d. As this is a forecast made 2 months after the end of the quarter, its a pretty safe bet its close to reality.
2. Forecast average production for 2015 32-33,000 boe/d. That implies exit 2015 numbers of 27,000-29500 boe/day
That lower production (roughly 20%) likely won't appear in a linear fashion - it will likey be loaded at the end of the year.
The good news is that kind of decline will apply to everyone else too, and that means something close to 2 million less boe/day in North America by the end of the year (oil and gas).
Such a decline also means an oil shortage in North America, and much higher oil prices.
Which inturn means higher drilling rates, higher production, etc.
Its very difficult to forecast cash flow in these conditions.
The capital efficiency of $12800/boe for the deep basin kakwa cardium is outstanding. (one of the main reason's LRE has lagged its comparables in cash flow multiples is because its capital efficiency was relatively poor.............last year's acquistions take it to the front of the pack (very good news for when prices return to normal).
The statement "Proactive discussions with our bank syndicate on our May 2015 borrowing base review" stands out. This is likely why the dividend was eliminated. LRE will not want their borrowing line reduced.
Comment by
veronikagermany on Feb 20, 2015 6:07am
Thanks for the heads up! I missed it. good presentation.
Comment by
veronikagermany on Feb 20, 2015 6:07am
if only the debt was lower, this is my only concern.
Comment by
veronikagermany on Feb 20, 2015 6:08am
The team has a proven track record too. So I stay, I do not sell of course but I do not add. Fingers crossed.