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Sanchez Energy Corporation Message Board

  • wallstreetchinaman wallstreetchinaman Mar 21, 2013 12:25 PM Flag

    Long term good, short term not so good

    Just listened to the acquisition phone-in. They're saying that Lease Operating Costs are running a lot higher for the new area, something like $20 per barrel instead of $6 for the old business. Expensive difference. This will hurt q 1 and q 2 earnings reports because the acquisition is effective March 1st. Long term they feel that they can bring these costs down, that's good. But short term profits will be hurt, maybe analysts will lower their numbers.

    On its existing business it sounds like the new batch of wells that were due to come online in March won't do so until April. Not what the street expected, not what shareholders want to hear.

    Between those crazy Cypriots & Ruskies & Eurocronies and the earnings haircuts for q1 and q2 (or a miss?), the chances are that the stock price will soon come off from todays Jim Cramer high. I'll buy but only on weakness after it pulls back a couple of dollars.

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    • Just look at the earnings estimates on yahoo, they've been cut a few cents for q 1and q 2. But the good news is that the analysts INCREASED their full year 2013 estimates and they are holding firm on their 2014 estimates at about $2.75, that's impressive. I expect the stock should get some nice buying support when the deal closes in the next coupe of weeks, it's looking very cheap, too cheap to pass up.

    • Q1 and q 2 eps estimates already coming down following the conf call where the low profitability of the new acquisition was disclosed. By the end of this week for sure the numbers will be lower, eps estimates for both quarters still need to come down a lot. If we're lucky the negative adjustments might largely be done by this week, fingers crossed.

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