Are you expecting Bernie Sanders to win and fracking to be banned? Oil cannot go to $200. If it goes to $200 we will become completely self sufficient within NAFTA. If oil reaches $75 you will have massive hedging and massive increases in CAPEX.
I wrote call options on it that expired, so my basis is lower than you may think. Last time i purchased down to less than $1 but got called at $2.50, so yes i am down this time but i cannot complain too much. Good luck buying in bankruptcy.
Not sure why you would be thinking of buying it in bankruptcy? Are you thinking about a legal settlement? If it goes bankrupt I wouldn't buy it because the current market wouldn't likely be enough to pay off the bank debt. If it doesn't go bankrupt and oil can make it into the $60s, it will be a very good investment. This is basically a call option on oil which (likely) can be extended indefinitely unless oil bottoms back into the $30's.
Hi, you say "working with the banks". I would modify that to "working for the banks" because "working with" implies some give and take. The reality is that there was no "give" on the part of the banks as of yet and I wonder if it is foolish to assume there might be some further down the road. With their hedging we know that there is no possibility for MCEP to reduce its borrowings sufficiently (so what was the point of the reduction). A question I have is that assuming futures prices go way up at some point, will the bank at that time come in and bankrupt the company (wait for an improved outlook and then sell it off).
I don't think you are exactly correct (I might be wrong though). I think they need $50M in proforma liquidity, meaning liquidity after the debt payment, meaning they need to pay down the $100M, pay the bond coupon, and still have $50M. With their production and mostly fixed hedges I'm not sure but I admit that I do not necessarly understand the collars. They need prices to go up right?