KCS is desperately trying to keep their heads above water, unfortunately too little, loo late! not only are they closing the new jersey office(which should have been done a long time ago) they are also consolidating parts of the Wyoming office with Tulsa, i heard they're moving the entire wy accounting and land departments, eliminating about 15 positions in wy. the wy employees will be let go gradually over the next few months with severance and bonuses. in my opinion they ought to let all of wy go, i think they got scammed on the whole manderson deal. anyone heard anything else???
What happened to last quarters results? I figure that has a lot to do with no upward movement on this outfit. Oil and gas prices are on the rise and inventories are FINALLY going down. I see this company's debt and it is scary. However, add a 1.00 to the price of a barrel of oil and that will start to dwindle. It's only a matter of time if oil and gas prices are really rising and not just hoping for an OPEC agreement.
Unless last quarters results are BAD, VERY BAD. Could that be the delay?
I have never posted a message before on Yahoo, but I liked the intelligent dialog on this board and want to see more of it. I have owned KCS before and made good money, and I think they can come back from this serious downturn. I bought in the late summer and early fall thinking "no El Nino this year, cold winter = high oil/gas demand, prices increase, etc... Well, we can all see how that worked out! My hope is that mgt will eliminate the dividend if necessary to service debt costs, and refinance where possible to reduce interest expense. The Chairman has significant stock ownership(over 1 million) and the float is only about 70% of outstanding shrs. This is a big risk stock only because of the debt load and current prices as far as I can see IMHO...........iibassman
I bought kcs at 3 dollars.Can only hope this recent increase in oil continues till at least april sometime.We might see some turn around in kcs price just on speculative buying.On the other hand if oil prices turn down again soon we may see a new low on kcs.Fingers crossed but can't say I'm overly optomistic considering kcs down last 2 days when all my other oil holdings moving up nicely.
KCS can pull out of this with higher prices. The thing to worry about is a reduction in their borrowing base that would require the company to pay down some debt, which could cause some liquidity problems.
Even if the prices sky-rocket, which is not likely to happen overnight, they are in bad shape because they are heavily leveraged. I think they are at the point where all the money they bring in goes to pay interest. Wyoming is a financially leveraged disaster. Very little flowing, yet they are paying 12% to 14% interest on the loan to buy it. With the high cost of drilling, there is no way at current prices that they are covering finding costs plus interest. I have been a shareholder and I really don't think they have the means to "weather" the storm until prices rebound. I think she is singing.