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Joy Global, Inc. Message Board

jimjones62 9 posts  |  Last Activity: Jun 24, 2016 11:42 AM Member since: Apr 25, 2012
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  • Reply to


    by ryanrickelsrh Jun 22, 2016 12:36 PM jimjones62 Jun 24, 2016 11:42 AM Flag

    yeah it was expected......on the macro it will effect global oil demand slightly, demand linked to GDP growth
    but recovery is holding lack of cap ex and depletion globally is on our side. Plus NGL prices are the best in 18 months and forward curve on Ng is favorable to hedge as well as oil to secure cashflow positive in 2017 in case recovery stalls until 2018

    Sentiment: Strong Buy

  • Reply to

    for dogwood, jtbc5000, etc

    by jimjones62 Jun 20, 2016 1:07 AM jimjones62 Jun 21, 2016 10:12 AM Flag

    New investor presentation breaks out Mid stream asset and value, my guess is they will monetize it in the q3....I think they could get around 100million.

    Its a positive development.

  • Reply to

    for dogwood, jtbc5000, etc

    by jimjones62 Jun 20, 2016 1:07 AM jimjones62 Jun 20, 2016 11:07 AM Flag

    So at 60 oil, 20 ngl and ng 2.75

    oil rev 81 million
    NGL 30 million
    NG 27.5 million
    total rev 138.5 million
    free cashflow before cap ex= 58.5 million

    They are able to be selffunding to grow production. If and when they lower debt through a transaction margins will further expand.

    at 5x cashflow$6-7 a share

  • by jimjones62 Jun 20, 2016 1:07 AM Flag

    Here are some numbers to clarify Arex positioning

    Guidance midpoint 4.5 million boe 2016

    cap ex 20million + interest servicing approx 25 million, + all other cash cost equals cash flow break even for 2016 rev must = 100million or $ 22.25 per boe ( boe for those unfamiliar is not all oil, in AREX case it's oil, ngl, and NG)
    Guidance for production midpoint
    oil 1.35 million barrels
    NGL 1.5 million boe
    NG 10 million mcfe
    SO what prices are needed to break even on cashflow for year including interest servicing and cap ex?
    Oil =$48
    NGL= $15
    NG= 2.25
    Total rev based on that price 102 million - 100 million = 2 million cashflow positive.
    or 22.73 realized price per boe for AREX based on the ratio of oil, ngl, ng these produce

    It show you they will be fine. Current prices and forward curve are higher then min prices need to sustain positive cashflow and they have hedges and higher prices then those above. Propane currently is 50/gallon or 21$ a boe (42 gallon in a barrel) a blend ngl barrel at conway and mt belvieu is current above $20...averaged mid $19 in april and $20.1 in may......if it stays around $20 for year add 7.5 in positive cash flow, oil at $60 adds 16 million to cashlfow etc etc margin expansion above oil 48, ngl 15, ng 2.25

    AREX is worth many times its current 2.26 a share

    Sentiment: Strong Buy

  • Reply to

    How can they lower their debt?

    by jtbc5000 Jun 17, 2016 11:34 AM jimjones62 Jun 18, 2016 11:23 AM Flag

    They have been approved by banking group to issue 150million second lien, they do that and buy back 230 million of unsecure bonds at .65cent on dollar lowering net debt by 80 million net interest savings of 6million, monetize water gathering, 80-90 million, pays down credit line and lowers debt 80-90 million and the interest savings on both these actions outweigh the cost that would be added by not owning the water gathering the end debt lower by 160-170 million, cost per beo would be marginal lower because of net effect of transactions, liquidity would improve and comapny would still have it's large hbp's acreage and reserves.

    The main things are AREX is one of the lest levered in space with a-class acreage in the Permian that is comprised of 2 large large blocks where extra long laterals can be drilled which are the most profitable. They have 9 ducs to be completed which means volumes can be brought on quickly and inexpensively (wells already paid for and drilled but not completed)

    Reserves per well are increasing with new frac design= lower cost per beo, high irr, better 60oil irr will be in the mid 20's= higher values per acre= higher net asset value foe arex

    Like kind asset sales have happened in area and whether you low ball are high ball AREX asset value you get at least a gain of 400% from here. There is no acreage available in permian, it's all held by c-corps so m&a, premium bidding is the norm because it one of a few area in the usa which you can drill and make money at $45-50 oil

    as far as macro stuff since q1 oil up +40%, NGL up +65% NG up +30, production in usa declining, cap ex slashed...rig count has risen but its a non issue for now because we need about 500 rig drilling to maintain flat production in the usa...

    My thought is q2 CC they will have added hedges in 2017 to secure positive cashflow, futures market is favorable to hedge 50% of prod

    Q1 will be the bottom for the industry i think as pricing

    Sentiment: Strong Buy

  • Reply to

    Value per acre?

    by dogwood1855 Jun 16, 2016 12:29 AM jimjones62 Jun 17, 2016 10:48 AM Flag

    And more importantly the production is PROFITABLE at current prices and type curves with new frac design are rising meaning high IRR's and reserves per well

  • Reply to

    Value per acre?

    by dogwood1855 Jun 16, 2016 12:29 AM jimjones62 Jun 17, 2016 2:19 AM Flag

    if i could id take them private

  • jimjones62 Jun 17, 2016 2:16 AM Flag

    not to mention 160 million in proved reserves 50 of which in oil

  • Reply to

    If this company turnaround it will be a 10-Bagger

    by chaser521 May 31, 2016 11:38 AM jimjones62 Jun 8, 2016 10:29 AM Flag

    great point they produce 10k approx of oil and NGL 3300 oil 6700 NGL, NGL prices track with oil prices.

    I wonder if a catalyst will be an acquisition for proved producing which will be financed through an expansion of credit line or swap of the 100-200 million range with sponsor.

    Sentiment: Strong Buy

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