Do you think the registration filing is effectively a move by Manny to put the company up for sale? You don't think he'll really sell his stock at such a low price do you? If he does, won't it be a long term positive for the stock since management will be free to run the company without interference and his meddling? Dennis Wilson is selling his 12% in Lululemon for $1.2B. Maybe he is looking for a new challenge? Dov Charney at American Apparel also is looking for something new to do. What better place than Bebe and all the hot chicks it attracts?
Most of the US North America natural gas production is hedged for 2014 and 2015, which is the siginificant piece. The Canadian natural gas production is really not hedged. Most of the other naturgal gas production is in SE Asia and most of this is linked to oil prices. Effectively, TLM has about 55% of its production in liquids or natural gas that is linked to oil. The other 45% of its production is North America dry gas -- Marcellus (~65%), Canada (~25%) and Eagleford (~10%). I don't see any big pop in cash flow if natural gas prices shoot up due to the hedges already in place that limit the upside at maybe $4.50 mmcf/d.
Didn't Carl sign a standstill agreement with the company last year as part of nominating two board of directors? I don't think he can increase his stake.
TLM already has already sold $200M non-core Canadian assets, which counts toward the $2 billion. It is apparent that TLM will sell its midstream assets in the Marcellus. My hunch is it might receive $800M+/-. TLM said on the conference call that it was expecting to announce 1 or 2 asset sale transactions in the 4th quarter.
Thanks for your feedback. I've been very unimpressed with Hal. He screwed around way too long trying to sell assets and deemed offers received too low. I wonder what kind of offers (if any) Hal can expect now? He's really put TLM in a real pickle. Spending big capex way above cash flow with little too show in the way of return. So much for "...living within our means."
You've been spot on regarding your view of the company, which is well documented on this board. Is there a price that gets you excited at all? Or is this a stock to completely avoid at all cost?
Appreciate your thoughts.
What did you think about the dividend cut? I thought it was pretty surprising since Bebe still has a big cash position and it reduced Manny's dividend from $4.6M to $2.76M per year. What was your take on the rumor through Bloomberg earlier this year about Bebe shopping itself around? There was a big spike in the stock to $7 before beginning a slow slide back down before it really tanked with Birkhold resigning. Very strange set of events....
As part of the sale of its 49% sales to Sinopec for $1.5B and offloading 50% of the abandonment liabilities (50% of $3B, undiscounted) in late 2012, TLM agreed to invest $1.9B from 2013 to 2016 to upgrade the existing North Sea UK facilities and expand on infill opportunities particularly its Montrose project (~$800M). It has probably has spent about 1/2 the $1.9B so far. Montrose is supposed to come on line in 2016. The free cash flow from the SE Asian operations is going to fund much of the UK work, which does not generate the necessary cash flow to fully fund the capex in the UK. After this big spend is completed, cash flow can be diverted to higher value projects with better returns, pay down debt and/or buy back stock.
Look closer at the SEC filings, Ichan's basis is closer to $12.50 per share. Ichan acquired most of his stake (all common stock, not preferred stock) mostly through deep in the money call options, but also purchased about 4M shares of the position directly buying stock. He has a standstill agreement with TLM, which allowed two of his appointees to the board. He can't raise his stake and agreed to support the nominees to the board back in May. I believe this standstill runs for about 1 year.