As i said earlier i have playing it since 2007. You know how many times i have doubled, and tripled my money? Then buying it back on selloffs. I have enough shares now not to be concerned because it is all cream. And yes banks and institutions love high insider ownership because those stocks are covered. Its unlike companies that have no ownership and float the credit markets. That does have an impact on borrowing.
Do you realize Hamm is not personally liable for corporate debts? How does that make the lenders feel better?
Too bad you fell in love with the stock. You should have sold at $80 and bought back twice as many shares at $40.
You're correct. Their credit facility should be tapped by this fall. They had negative FCF of $756 million in the first quarter. Second quarter FCF should be in the negative $450 million range if oil sticks around $60. Another $450 million in the fall. Their credit facility is wiped sometime in the early fourth quarter out and debt covenants will force them to issue more shares, not take on more debt. Union Bank must be shaking in their boots at this point. While oil prices are at $60, Bakken oil is at $49. On top of that, natural gas prices are collapsing again and may be near $2 by fall. That's about 30% of revenues and mostly unhedged by now. Oil is completely unhedged. The crack between Brent and WTI has practically closed. That means besides a US oil glut, there is a global oil glut.
Insider ownership means nothing to the lenders. It's all corporate debt. Hamm is not personally liable for any of it, so the lenders won't take any comfort in him owning a large percentage of the shares outstanding. CLR in the $40's is living on borrowed time.
Do you realize their debt covenants do not allow them to take on more debt? Do you realize their credit facility will be tapped by this fall?
I have no worries about CLR and credit. If anyone knows Mr. Hamm would recognize that a lack of credit is improbable. What other oil companies have such high insider ownership? That right there equivocates the facts of ready available equity. Banks feel better about lines of credit for companies who have a proven record to return profit. CLR is doing just fine. I have been playing CLR since 2007 and made more than enough to hoard enough shares that i will never sell. Its all profit from this point onward.
I have them running out of money more towards the end of the summer or early fall. In any event, I expect that it will come after the 2Q numbers are released. I think 35 is a good price target. Of course, if the price of oil goes up all bets are off. If it goes down another 20% then CLR is seriously screwed.
Any thoughts on when management will bit the bullet and finally realize oil isn't going above $70 anytime soon? They are going to run out of room in that credit facility this summer. If they choose dilution with a secondary offering, like I expect, I would think we'll see some serious downward pressure on the stock price. $35?
forward PE 46
balance sheet $47 million cash and $6.8 BILLION debt
free cash flow was negative when WTI was at $110
Investors will never get their money back unless they can find a greater fool to sell their share to.
CLR will never be able to pay dividends except by issuing more debt
basically a big ponzi scheme
I agree with you on China. How can you keep putting out trillions for empty real estate and not get paid, even interest. The average condo in China is over $100,000, but the pay for most workers is below $10,000. The numbers just don't work. Last summer the Chinese gov't tried to stem the massive speculation in RE, by restricting lending and encourage speculating in the stock market. so, now they have a twin bubbles in the RE market and stock market. There is also a problem with substandard materials used, like concrete.
Sentiment: Strong Sell
None of those countries can afford to shut down production. They are in the same position as the frackers. They need the cash flow to survive.
There are 5000 DUCs in the shale areas ready to add 500kbpd to US production. I put the cap for WTI at $65-70. That is where the frackers will complete the wells and start pumping. On top of that, China's economy is a house of cards and about to be blown away. They have $18 trillion in local government debt, trillions more in debt for ghost buildings and cities. All of the increase in global oil consumption since 2006 has come from China.
The one thing that might allow for the oil price to rise say, to $75-80/bbl., would be for a number of producers such as Venezuela, Nigeria, Angola, Iraq, Libya or the North Sea to shutdown production. Many of them are already cash strapped and living off loans from their partners. You take depletion of around 5% and factor in another 10 MM bbls. from them and prices will climb back up so most that US frackers could survive. Between refracking wells and using more proppant and longer laterals, there have been some impressive increases in production.
But , I still think CLR has more to drop before it hits a bottom, unless a big event hits in the ME.
My mistake, I thought you were saying they would be bought out at $80. The reality is this company, like many other frackers, is worth a big fat ZERO. They are all saddled with debt that can never be paid off, only rolled if the markets allow. These clowns claim they will be cash flow neutral by end of 2Q? LOL!!! They are setting themselves up for a huge class action lawsuit with ridiculous claims like that.
If they haven't purchased any hedges when WTI was at $61, they're almost out of time. Union Bank must be #$%$ in it's pants. That LOC will be tapped later this summer. Their debt covenants don't allow any more debt. The only choice is dilution. If oil can barely hit $60 when refineries are running full speed for summer driving season, then we will see the $40's and maybe even $30's by late summer-fall barring a major war in the Middle East.
I was making the point of HH's opinion of his companies' worth. I think this is an accident waiting to happen. I do know some bagholders, but I'm not one of them. Oil in the high 50's, with no hedges (deduct $10 for transportation) and it's liabilities of L-T debt, accts. payable and deferred taxes spells a selloff. Earthquakes and floods in OKLA. As if they needed more problems, but they've go them. And, the banks might force them to take on some low priced hedges to cover their exposure.
Sentiment: Strong Sell
Oil at $110 and CLR at $80
Oil at $57 and CLR at $80? LMAO!!! You bagholders are even more delusional than Hamm when he sold all the hedges with oil at $80
HH is not going to sell out for anything less than the $80 yearly high. The recent swoon maybe signaling the CWEIIng of CLR, you know where lowball onerous hedges were forced on them to guarantee the banks the cash would be there as the oil got sold. Could be what's in the offing here.
Sentiment: Strong Sell