I was expecting worse and actually am positive as to the news. The EPS miss is irrelevant as it is filled with a ton of noise around the EPL deal and Merger related expenses. If you strip that out they actually did ok and beat on revenues. This current quarter is where they will get the benefit of the merger synergies which should be helpful, although there will still be some Runoff merger expenses. They are spending less on the ultra-deep and the Lomond project at Highlander will determine if that has any future potential since too much has been #$%$ away already, I do love the current 8 rigs in use with 6 for 2015. Combined with the expectation if almost doubling the wells they drill in 2015 this stock could finally turn around if Schiller and the management team execute on their plan (which I admit they have done poorly on that execution for the last 2 years). The stock may fall tomorrow morning but I would not be surprised if some bigger players started accumulating. The PV-10 they have is valued at $7.6 billion which compared to other companies makes them undervalued on a market cap basis. They also are a takeover play or an activist play which also should increase investor interest in my opinion.
Best to all and hopefully the stock will rise tomorrow,
One measure of EXXI's performance is the return on equity.After the merger it may not have improved and at under 4% is miserable compared to competitors. Didn't really diversify the asset base/risk but did improve their ability to lower operating costs, and should extend the life of reserves and production. Conversion of the acquisition to increased stock prices isn't certain as there are too many questions about managements operating abilities. Lacking in depth or understanding may be on investors minds. They have been given a lot of chances, but aggressive hedge fund managers are likely seeking a new CEO candidate before investing heavily, but they should invest a lot of money and force management changes to increase the stock price over the next year.
You are quite the perma-bull. I think the EPL acquisition was a coverup of poor past decisions(prior acquisitions) . The new debt level - jump to 3.7B, and now the debt to equity ratio is alarming. What is the new share count, and NAV per share without the goodwill?
I still like GOM assets and will wait and see if there is value around $17 a share...