For me the most important parameter in the stock market is a company's share price... all others take a back seat. One has to start asking why such a significant decline at such depressed levels? What known .. unknown factors are driving investors to sell... Yes NG prices are down but the oil remains above $100/bbl. I am not sure even why I am hanging on.. I think others have made a compelling case that the company has the opportunity to make some positive changes and they have without any positive investor reaction..
That has been a surprise to me and makes me wonder what I do not know.. Can anyone list the reasons why they are still invested and what you feel will make the shares move up? Last announcement was apparently positive but was met with a deluge of selling.
Selling usually breeds more selling; there is nothing supporting the stock; management doesn't do any meaningful efforts to promote the company; they rarely communicate, they don't even hold conference calls. Their production has been stagnant, their debt load is high and the company doesn't have a dividend or growth strategy; these factors combined with weak NG prices and weakening NGL prices are weighting on the stock. I also believe some investors were holding the stock in anticipation of the Mississippian deal, when that happened and the stock didn't move, they started to exit.
There is an opportunity cost in holding an asset like EQU if you don't believe change is forthcoming, unfortunately management has been reinforcing this belief by ignoring shareholders concerns.
I do believe that the board is in breach of its fiduciary responsibility, there is a real worry if the stock continue to decline in value, the value of the company will be impaired should a corporate transaction take place; and indeed with such a low valuation a hostile entity could attempt to swallow the company at a depressed price; the board and management are directly responsible for the deterioration of the situation.
As of today close, the company enterprise value is $261m (including the Miss. $18m payment), at $261m, the company is trading at $26600 per flowing barrel, such valuation is unheard of for a company with 13% crude, 37% NGLs and 50% NG. Management should be ashamed of letting matters sink to this level. With everyday they delay concrete action, things get worst, they need to come out immediately stating that a full strategic review is ongoing, and a final decision will be taken in few months; this alone will halt the decline and send the stock back above $4; and eventually any model they adopt (a dividend or a growth model) after the proper divestiture is done, could take this stock back above $6.
We own this company, it is ours, and this is what we want as shareholders, ultimately, we will prevail. I assure you no board of directors or management ever prevailed over shareholders, and especially so when they own only 1.6% of the shares.
It is not just the % decline but the volume that has me worried. A relatively large amt. of stock was transferred today. My question is who would be selling and what would motivate them to sell large amounts of stock at these depressed prices? I am aware of an immenent market decline but EQU is so oversold this decline should have little effect on it. It will be interesting to see if any news comes out in the next week or so which may explain this high volume day. I know we have been pressing for change but what kind of change would bring on this kind of adverse investor reaction? Speculation breeds in a information vacuum. If the share price declines further, would it surprise anyone if Mr. Klapko announced that he proposes to take the company private with an offer of $4.50? I urge all to take the time and send the management our concerns.
ej, I agree with you insiders can buy; but my point was this bunch of insiders is not going to buy, they are flooded with grants, and so far management has shown no indication that they would take confidence enhancing measures such as buying in the open market.
Indeed ej my cynicism when it comes to this management team has been running high for a while now.
Insiders / officers / employees often receive 'grants' or options as part of bonus or compensation packages. That is common, but they also can, and occasionally do make individual purchases if they feel the company is undervalued (vs. insider knowledge of some unannounced event, which would be illegal). They either don't believe that to be the case, or seem content with their packages, while share price decays along the way.
Nawar your cynicism is showing, as is many of our levels of frustration, not helped by today's 5+% drop.
Insiders don't need to buy, they get their grants for free...As for the general market, investors are not interested in buying shares in a company with no strategy; while as you have correctly indicated a merger is complicated by the US/Canadian split; thus the need for the company to restructure and divest the Canadian or the US assets.
...so again, why in simple terms does the stock continue dropping rapidly, in contrast to its peers and the general market? I have been investing in stocks for many, many years and I do not understand this. If they are valued at 2 to 3 times current price, are they too small to be purchased (or merged with) by another O & g exploration company, or the complications of a split Canadian / U.S. holding-ownership..? If it were such a bargain as it seems, neither the general market nor insides seem to be buying.
Wow. Now going below 3.25? 5% decline with volume at these depressed levels must mean we are losing some large holders' confidence. I guess they are voting that the management has the upper hand and /or ng/ oil prices will decline further. Any other ideas or observations?
One thing I've been wondering about is EQU's exposure to NGL's. Maybe that explains some of the stock's market action? Remember: although EQU is 50% "liquids", those liquids are mostly NGL rather than oil; EQU's liquids are 74% NGL, 26% oil. Anybody know of a peer comparison where the liquids are weighted so heavily to NGLs? It would be interesting to see how their stock is trading.
Historically, EQU's NGL's have been priced at around 53% of WTI, according to EQU management, but I believe the NGL pricing they're getting right now is much lower. Conway Propane is currently at about $41/bbl, WTI oil is at about $103/bbl, and EQU's NGL mix seems to sell at around 80% of Conway Propane (eyeballing Slide 10 of the Hunton presentation on the website). So that implies EQU's NGL mix is now selling for about 32% of WTI. That percentage is at the very low range of its historical average. So the question is, how permanent is this change? I'm guessing 32% isn't the "new normal", but perhaps 40% is due to all of the new drilling and fracking technologies coming along.
The company needs to immediately declare a strategic review, during which it needs to study the shareholder's plan, as well as evaluate all other options. The market is voting hand and fist, shareholders should stop tolerating this incompetence, voice your dissatisfaction to the company, FLOOD them with emails and phone calls. I just faxed them a letter asking for immediate action.
Wow. The share price is now 3.30 on more than avg. volume. Other ng producers are not experiencing that much selling. Something must be affecting this company other than what is known. Time to sell or double down again? Avg. down is usually a bad maneuver. Any ideas on what is adversly affecting this security?
I follow this company quite closely and nothing to my knowledge has changed; the only thing that is perhaps playing a role is the renewing of their credit lines in June; however the company still have 44% free borrowing capacity on that line, thus they are not in any immediate danger even if the line was reduced.
My guess the continued selling is due to the total collapse of confidence in management; the board needs to act fast to salvage the situation, either adopt the shareholders plan, or proceed with a credible alternative.
Wow. Today we continue the persistent share price slide. More sellers.. When will it stop? Any ideas? We are below $3.40. By the time the May share holder meeting the share holders' cost base will be lower..The average share holder outlook/expecttions will have changed. How many with high base cost will be left and be willing to hold on?