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so truth,lay it on me brother,where the heck is LPI PPS going this month? today & yesterday this POS cant get out of its own way,jmo
If LPI or Warburg had the view of a Saudi Market Share World, with a downward sloping crude oil price forecast --not too dissimilar to the NA natural gas markets the last few years...... then maybe someone would
get a little more serious about monetizing the resource base now. They need to start somewhere, and
I do think it will be a series or phases of small deals, though if Exxon got interested they could just buy it all.
Really, the company valuation based on 297 mmboe is just the tail of the dog. The dog is 4.5 billion barrels,
but it will take $40-60 Billion dollars of capital investment to ever monetize all of those barrels of oil. What is LPI's level of investment this year? $475 million. What was it last year? Even at last year's pace, and $100 oil these resources would not add any value to LPI's shareholders anytime soon without some creative deal work. Dont let the perfect kill the good and don't model the last ounce of return out of the deal for the counterparties. Put yourself in their shoes and think about what kind of a deal can get done that accomplishes
some near term shareholder value. Otherwise, we may all be dead on the current monetization schedule.
Are shareholders better off with some present value that got 80-85% of perceived value now or
100% of perceived value 10 years from now? If you believe oil is going back to $100 in two years
fine. I'm not one who believes that as a base case, but if we had strong global economic recovery and or
disruptive war, I suppose it could happen again. My vote is to get more serious about monetizing the whole
dog sooner. Where is Warburg?
That press release was a little disappointing to some I guess. Doesn't seem like they are anywhere close to doing anything but talking about deals. The counterparties are looking for distressed assets, and a little upside, and LPI is looking to sell assetson very tough terms--(my perception). All the data that LPI has would normally seem like a boon to any buyer but LPI may be using that same data to model the other guys to a 0 percent return. Then it would be a "good" deal. The conundrum is that LPI had at least a 40 year drilling inventory when at $100 oil. At $50 oil with one rig running, and all the other rigs in the industry stacked, that may as well be a 1,000 year inventory now. No one is going to leap at the chance to unstack 20 rigs right this second and start drilling. If that was the case, LPI would do it themselves. I don't see anything happening deal wise until the storage overhang is well worked off, and the Iranian overhang is made more clear, and the industry as a whole can really envision unstacking rigs. Then maybe someone can see a deal because any deal has to involve drilling, and buying acreage to drill before you can actually envision drilling is hard to do, especially if LPI wants a mint for the raw material. These are not distressed assets. That was what the stock issuance and hedging were about. But, when someone is "buying" an opportunity to go spend a lot of their own money, they will want either a little perceived upside or absolute certainty or as much of both as they can get. WIth as much of an unmonetized drilling inventory as LPI has, I believe they need to understand that the perfect should not kill the good. They may never get a perfect deal. Given the size of their job, 4.5 billion barrels of resource compared to 297 mmboe of proved reserves, they need to start converting some of that to shareholder value. (continued)
Yes Julson..its making a base before moving higher
LPI is up almost 40% this year, so a little pullback is good!!
Its taking support at the 50 EMA.
Stop loss around 13.65
Target $21 in 3 months
Sentiment: Strong Buy
hey hard wood, so you thiink this LPI pull back is ok,considering it had a nice pop last week? thanks
You fool...try to listen to the management presentation today.
LPI is one of the well managed E&P companies, primed for an acquisition. Investments from Warburg and Wellington give credibility to the company.
LPI has enough cash to service debt, production volumes rising nicely.
LPI can also quickly ramp up production when crude oil prices start going up.
When crude hits $60, this will be above $21...!!
BUY AND HOLD!!
Sentiment: Strong Buy