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Lone Pine Resources Inc. Message Board

  • smattwatson smattwatson Jul 4, 2013 12:04 PM Flag

    great article on Seeking Alpha .... there is obvoiusly downside but so much more upside. This is a gamble with great odds.

    #1: The issue for Lone Pine is entirely related to the debt/EBITDA covenant, not overall solvency. There are no debt maturities due until 2016 (credit facility) and 2017 (senior notes). The straw that broke the camel's back for GMXR was the $53m convertible bond that matured in February 2013. At the time, GMXR did not have a line of credit, so after it paid off the convertible bond, there was no cash left and no flexibility. Lone Pine is much different because it has no looming repayments and has a large bank credit facility already in place. The entire issue could be put to rest if the lenders agree to suspend the covenant for some period of time to allow for additional asset sales and for production levels (i.e. EBITDA) to increase.

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    • I think the positive SA article on LPR was generally well written and researched (at least much better than what I could likely produce) and the author is probably long. However, the comments made by SA readers suggesting a good possibility the company's equity could be wiped out because of its financial problems and a depressed market for its oil/gas assets also seemed valid. I was disappointed the author did not respond to any of the comments as it would have been interesting to hear his view. After reading the article and comments , I decided to bail and take a significant loss as I felt the probability of a total loss of its current equity might be 50%. LPR may work through its difficulties and double, triple, or more in the future, but my perceived risk of a total loss of its equity was greater than what I wanted to take. I may redirect its sales proceeds into its debt, as its assets no doubt have substantial value overt the debt if they are not sold at fire sale prices. Good luck to longs.

    • seeking alpha is a pump and dump company.they probably just bought in the 30 cent range and are now pumping to try to get the share up a little and then they will dump.i have seen this scam group to many times.a big reverse split is coming to this stock.buyer beware.

      Sentiment: Strong Sell