Guidance is key here. How are they going to do without any hedges moving forward?? That's what I want to see with this company that i hold no position in. Just very interested in this entire sector.
Gave different numbers that are very wide apart possibly why it is not really trading. You have a .24 miss then adjusted numbers that are higher???
Look what happened to Rosetta today. They have hedges and were downgraded by a few analysts. Just wait for the bloodbath tomorrow afternoon when the downgrades start pouring in
Appreciate it. Thank you and yes, completely get it now.
I believe the analysts who are predicting an average of 56 cents or so per share profits, those people deserve to be put in jail. when the report comes out tonight after the close, they will have to tell you all that they lost money last quarter and have no hope of making it back for the next quarter or several quarters.
They do not ever "sell their hedges". The hedges consisted of futures contracts to deliver x amount of goods at x price on x date. What they did was to fulfill the contracts by delivering the oil. The average price was way above the spot price at the time but probably down considerably from last summer. What they did was to fail to obtain any new contracts at the new prices, which were way below last summers prices but way above what the markets are paying now. So now, they must sell all of their oil at the spot price, reduced by the transportation charge to get it from North Dakota to Cushing. Does this help you to understand?
I understand that they will have a one time gain from their selling the hedges but what about forward guidance with no hedges left? How bad will that crater their guidance? Wouldn't that make it the worst one yet with forward guidance?
I can't predict how the stock will trade in the immediate term but until oil goes up significantly, they are very overvalued. I wouldn't get long above $30 based on current growth prospects. They are losing money hand over fist right now. There is a reason they touched $30 before WTI was even below $60.
If they hit $27-$30 I would start buying just due to reserve valuations and the likelihood that they will get taken private by Hamm. The odds of them going bankrupt are close to zero. A private equity fund will always be around to offer a #$%$ deal for Hamm. He can give up more equity than he should and he can get his debt problems covered. Shareholders will get a nice premium and CLR will no longer trade on the public markets.
I agree the key may actually be what they say going forward but in the energy market who really knows where prices are going. I guess it grinds toward either $40 or $50 days later.