To address this risk, the company hedges about half of its crude oil production at a price of $90 per barrel or above. It also has one of the strongest balance sheets among its peers. The company has very little debt while producing substantial amounts of cash.
However, oil and gas development can be very capital intensive, and analysts expect the company to outspend its cash flow next year. As a result, Mabry believes that Bonanza will likely need to raise more capital in 2013. He estimates that the company may look at the high-yield market to fuel future investments.
Management has a long track record in the oil and gas industry and is well regarded by the analyst community. Some 62% of the company is owned by the top three institutional investors, while management owns 3%.
"As far as technical acumen, these guys bring a lot of horsepower to the equation," said Coleman.
"The fact that we've seen the same financial partners come back to the table a few times now to essentially back the same management team, it certainly speaks well of management," said Mabry.
it is obvious this public offering is to line their pockets. anyone that thinks otherwise is a idiot. thats ok. thats the way it works. dump when the dumping is good. that is how you get rich. but who knows, the company may continue to perform. but the risk factor has just doubled at the shareholders expense. welcome to wall street. if you have a profit, dump with them. wait and see where it bases. cause if you think it is going to all of a sudden shoot up from here. well, you really need to get out more.
do you understand that there was no dilution? no added shares at all. this was a single large early investor cashing out and this puts a floor in at the offering price. i really think you do not understand what happened. the fact that it was oversubcribed should tell you that the demand was very good