The truth of the matter is that CEP is a much different company now. They are tap dancing on the edge of the abyss. It appears highly likely that they will survive, but let's not kid ourselves, we are talking about a company that took years to whittle down its debt, and then essentially changed its strategy and divested a huge portion of their reserves. They would have been better to divest the Black Warrior Basin assets a few years ago at better prices..or to continue to milk them for cash flow.
All that being said, their is little doubt now that CEP is cheap.
They now have about $21 million in available credit to pursue oil opportunities. I am interested in seeing whether they choose to deploy this cash into drilling efforts, which will take time, but will ultimately, if successful, provide much better returns than purchasing production.
They do however have an opportunity to try and roll up existing assets in the Cherokee basin which will add very little in the way of SG&A due to having existing field crews and gathering infrastructure...which will result in more cash dropping to the bottom line.