I mentioned repeatedly to this board that you could tell the Frank would be a disappointment from the Q3 CC. There is the possibility that the cleanout may resurrect some production but the Logan also appears to have problems with a stage 2 pressure failure. It is also unfortunate that GMXR only had a 2% interest in the Marsh 21. High percentage GMXR ownership wells continue to produce below "statistical modeling" and GMXR needs very very favorable results in the Niobrara and much better Bakken results. Overall, H/B holdings still have significant "long term" value and the C/V has reasonable value. Problems arise from current well results in the Bakken and the many varied small parecls outside the sweet spots. Most of their holdings are spread out which lessens overall valuation to a White Knight. IMO trading in the preferred shows a large owner liquidating a position to just get it off the books. I found nine Pfd. holders with shares in excess of 1 million shares and another at 798,000 shares. Third Avenue Focused credit fund was listed at 12,000,000 shares. It is obvious in this situation that liquidating a share holding of any of these nine holders will highly pressure the market. Along with a major seller, you get a tag-a-long effect of people with individual shares dumping as they feel they are out of the loop and "someone must know something". GMXR is in a survival battle that may be lost. Selling remaining nat gas properties at a discount could obtain substantial funds but the debt load is exceedingly high. IMO a deep-pocketed group could buy GMXR but would need to additionaly purchase significant junior debt at a discount to make things less risky. IMO the sum of the pieces inclusive of cash could show positive equity but if this is heavily discounted the common and possibly the preferred would be wiped out. Currently the play (IMO) is obviously the preferred as it is above the common in liquidation ranking and offers a "four-bagger" should a white knight arrive. It additionally may benefit from any interest payments made by GMXR as the company attemps survival. Buying the Pfd. by GMXR I don't think is a possibility as they have been a seller in the open market to obtain cash and I think will harbor any current cash. Obviously this is dicey, spicy stuff with a toxic air about it. Hopefully the Pfd. will clear and future well results will be more meaningful. Keys going forward will be clarification on the Frank, Logan and the Evoniuk + any good Niobrara news. The Lange may provide some needed production flow. The upcoming dog and pony show presentation could offer some positive news and it is badly needed. Good luck to all.
Wist, check your numbers! Total pref o/s is only 3.2 million shares, so obviously no single investor can hold 12,000,000 shares!
With 20% of pref float changing hands in the last 3-4 days, the immediate selling pressure might start to ease.
YES Sir! You are correct...my fault and apolgies (I have been running wild over many issues and a variance of stocks/ETFs). The "par value" was $12,000,000 which is equal to 480,000 shares. The total of the top 10 holdings was a par value of $35,426,000 or 1,417,040 shares. I have been a buyer of the preferred over the last three days at a multitude of prices. Total risk money. 10,000 shares at a blended price of $6.51.
Reductions in cash compensation, long-term incentive payments and annual incentive bonuses for the executive officers.
A reduction in force of approximately 13% of the employee base through attrition and consolidation of responsibilities.
The reduction or elimination of a number of other non-compensation related G&A expenses.
The total 2011 cash compensation paid or awarded to the top three executive officers is estimated to be approximately 36% less than they received in 2010. In addition, approximately 25% of the estimated 2011 cash compensation for the top three executive officers may be deferred by the Company for two years and paid in common shares, if available, under the Company's Long-Term I like the sound of that produce more oil and get paid more like the rest of us.
Was there anything in the update that gave you pause, one way or the other, to be more or less optimistic about Gmxr being able to stay alive as a viable entity past early 2013? Or will the actual cash flow need to be seen?
It will be a fight but there are some possible bright spots and obvious roadblocks. The major roadblock is debt which is huge and also the reduction in nat gas pricing which lowers value on CV and H/B holdings. I have always felt that H/B was a true crown jewel with a gathering system/infrastructure in place and good well results/predictability. GMXR has cash to drill but the results have to be much better. The difference in PV-10 value of 500 vs. 700 Mboe is $6 million from a Brigham presentation. One bright spot may be Niobrara and the seismic. Benson sounded very optimistic about the geological regarding Doty Hill and they need some good news. Should Devon come up with some solid economical wells, this will help GMXR. One problem is the overall footprint. Should GMXR sell down acreage with participations and JVs, they may not be able to grow enough through the drill bit to offset debt costs. Management finally reducing overhead shows some promise and the deferring of exec comp is at least alligning themselves with survival and shareholder interest. No one knows the value of GMXR, but if you give CV $100 million and H/B $250 million that would total $350 million. Debt not considering preferred is approximately $476 million. If you took total proceeds from H/B and CV and reduced debt (AT A DISCOUNT) by buying in the open market or on a redemption offer....you may be able to get the long term debt down to less than $100 million. Then you have a GMXR "oil" company with drilling cash and interest to pay on a reduced LT debt + interest on the Pfd.. Obviously GMXR would want to survive and reap better nat gas prices but they may not get the opportunity. The sentiment is SOoooo negative and the tape action has been catastrophic. This may be a "tell" for BK but also this stock and the preferred could wash through this deluge and the surprise would be that the sellers exhaust themselves and the new owners don't flip for mini profits. Good luck.