Long Run Explor Ltd Ord WFREF

Economics

[STE15165]

I'm a little worried as oil slides that we won't be economically viable because of our debt payments. Is that possible or probable. I'm sure there's a few others in our position.

[ppp]

We shouldl CF 70 cents this year or about 140 mil. More han enough to make interest payments. Trading at 1 times forward CF.  Never would have guessed that.  Picked up a few today.   Good luck if your long or short. 

[aaaaaargh]

Long run will survive for this year for sure, as a lot of their production is hedged for 2015. Things will be a lot tougher after that if oil and nat gas don't tick up some. Currently they only have 10% of nat gas hedged for 2016 (at I believe it was... $3.05. Check their last monthly presentation). If prices go lower and stay low for a LONG time, then they will struggle mightily along with a

[ppp]

My thinking is LRE is going to announce a sale of some property in the near future. after all they stated a 100 mil worth. We will see what they get? this will give the market some direction as to what the value is for this company. As far as projecting past 2015 its a cra$ shoot. 

[goldenegg]

ppp - you should ask them why didn't do an equity raise or a bought deal at 1.15? even offer it at a discount at $1 - from Jan to March the stock hovered around 1.05-1.35, and oil was above 50/60 respectively - there was a window for them to do so, now that opp is closed. 100m to reduce debt which is the biggest overhang on this stock and they couldn't pull that off? that tells me

[ppp]

Gold, here is the way I look at it.   Lets say they raised 100 mil at a dollar. They would gave dropped their debt by that amount but raised thier shares by 100mil.  Means the EV value stays the same. So we have debt of 739 mil and MC at a dollar of 200 mil EV value is 939 mil Production of 35000 bbls     26.82 a bbl Reserves of 170.6 mil.           5

[testy1]

It looks like that possibility is starting to be priced into the share price.  I wonder if we'll get new paper like after the Guide merger. With companies I've had that can't make debt payments, the debt holders got the company.  I got a tax write off.