Post by
pablo87 on Apr 22, 2019 10:55pm
Wishlist while waiting for results
Really what we need is a year of sustained WCS prices at these levels and it could get to 10 cents IMO (assuming no buyers for the company...) based on cashflow (is it trading at a little over 1x field cashflow right now?).
Things I'm hoping to see from management in the next presentation:
#1 actually start drilling in Canada - would generate additional cashflow, lower the Cdn break-even and move the reserves to proved producing, improve LMR (not sure how that works...). It works for the same reason a retiree is "better off" investing in dividend paying stock than leaving it in the bank.(Warren Buffett tells a really good story of how a BoD he joined was investing prior to his arrival and how he showed them how to do it right).
#2 pay off the loan - after #1.
#3 A&R detail - would be nice to know how many wells/pipelines they can actually take care of for $2M (I saw an OBE presentation said $40,000 per well for Area based but who knows). Hindsight, it is the bigger liability perceived by shareholders (compared to the debbies) and of course no news is bad news.
#4 make an effort to lower SG&A - of course they cut a lot already 2 years ago but more recently its only debentureholders that took a haircut...Is SG&A ~$5.50 per bopd at the moment?
#5 - see if they can sell North dakota and swap for a Canadian asset (eg. EGL Canadian asset?) - would be more efficient esp. tax wise (did they pay $800,000 in US taxes last year despite having a 9 figure non capital loss in Canada). That ship may have sailed though.
Over to the cyberbully.