1. I am finally back from a road trip/ vacation with my wife. Have a very nice time.
2. Called GMXR while on vacation and today. Still no call back.
3. "Press Release: GMX RESOURCES INC. – Mon, Mar 4, 2013 5:00 AM EST":
"The Helmerich & Payne FlexRig 3(TM) #255 has been relocated to Sections 16 & 21, Township 143N Range 99W in Billings County, North Dakota. Plans called for the FlexRig 3(TM) to drill two Middle Bakken wells off the same pad.:"
This Rig is missing in action. The North Dakota Web site doesn't show this Rig drilling.
4. GMXR still hasn't release a date for 10K release & Conference call:
Form 10-K Deadline:
Category of Filer: Non-accelerated Filer
(less than $75MM) public float
90 day (March 31, 2013)
Hey Ed: I don't think the rig is MIA but more likely H & P won't drill due to GMXR's financial position. Who would want to get stuck holding the bag. Until there is a major solution, suppliers will probably start demanding cash or payments up front (which I predicted months ago as a real possibility). This will accelerate a downward spiral in operations. IMO there is a lot of jockeying around but it will still end up in reorganization. Kenny is seeking alternatives in hiring an advisor but it is probably too late. GMXR doesn't have the financial gun powder to compete with GSO/Blackstone and lacks the ability to control it's own destiny. Some form of negotiations may be going on but GSO has tied Kenny's hands in asset sales and need to just play a waiting game as cash dwindles. To me, the only question is who ends up without a chair at the reorg table.
Starting with the premise that Kenny's main goal is to continue to be CEO and draw a nice salary, one option he may be pursuing with Jefferies is a sale of (i) the Bakken, (ii) Haynesville, and (iii) pipeline. The Secured bonds don't prohibit asset sales, they only provide that the proceeds of asset sales have to be offered to the secured bondholders to repurchase their bonds at $103 (see section 4.16 of the secured note indenture). If GMXR can raise $400M by selling these three assets, they can use $375M to pay off all the secured debt, and have $25M left over to start drilling the Niobrara. If GMXR management believes what they've said in presentations, they think the Niobrara could eventually be worth more then their Bakken holdings. This allows Kenny to still play oil company CEO, at least for a couple years until the 2015 bonds come due.
I got out a few weeks ago just because I was tired of the emotional roller coaster. I'm not one to ever debate buyer/seller remorse(that would be pointless) but I am curious to know your thoughts on the future of the company.
What do you think GMX plans are for the remainder of 2013?
Even with another $50Mil in Capex (let's assume they sell further assets) will they be able to get out of the red by 2014?
"but I am curious to know your thoughts on the future of the company."
I really have no thoughts on GMXR at the moment. Until GMXR comes upfront with its shareholders; we are in the dark what GMXR plans are.
At this time, GMXR is not being straight with its shareholder, its preferred holders; its Debt holders.
Each Press release leaves many unanswered questions.
Example; where is Rig H & P 255. The Rig is not drilling according to State of North Dakota
Why avoid answering calls from shareholders. GMXR does not need to answer all questions.