dlight, looks like your backing off on your price target if only at $4.25 in Jan and $4.50 Feb. What if HRB is a billion dollar event? Or two billion like Barnett? Seems $4.25 would be well below fair value. Agree long term KWK is a winner with Discovery LNG. But shorter term with forthcoming HRB JV news is where I'm most intrigued. I still believe this could jump 60 or 70% or more within a day or two of a very positive announcement, assuming there ever is one. Being patient for now...
That would place the share price at $4.50-$6 range which is very possible if the HRB deal is anywhere close to Barnett. I'm very optimistic about KWK now more than ever.
EPA will now allow states to relax their proposed new emission rules in 2014. Don't write off coal just yet. It's a sticky mess right now, many NG producers loosing money because of oversupply and suppressed pricing, yet whenever NG price increases coal becomes more in favor due to lower cost. I suspect both NG and coal will rise together in 2014, as will everyone's energy cost.
Obviously the higher NG price bodes well for KWK, but let's face it, many here are simply waiting for the Horn River news and think they've found a truly undervalued company. We'll all know soon enough. If you have a several year time horizon and believe NG price/use will increase, buying KWK here at $3.00 is a no brainer.
I think this is still the "wait and see' period. That could end any minute, any day. If the HRB JV fails to materialize, there will be a big sell-off. If the HRB sale amount is only a few hundred million the stock will decline, although not as much as no sale. If the sale is comparable to Barnett, I see $1.5-$2 billion in added value to KWK. How much that pushes the share price is unknown. A short squeeze could inflate share price well beyond the $1.5-$2 billion HRB sale price.
I think the question many people will be asking themselves in the next few weeks is; "why didn't I buy a lot more at $3. I knew this was going to surge."
kem, you like GNK or just DRYS? Don't have a position in either, was thinking of scaling in next week starting with DRYS but missed the $3. You think pullback from $3.44? Seems $3.50 is headwind.
Glenn Darden has told us more than once HRB's parallels to Barnett, including on the last earnings call. Barnett was $450mm deal, valuing the acreage at $1.8 billion, minus some JV outlay. If HRB is a $2 billion deal we will all be real happy with the share price, and I might finally get the massive short squeeze I've been waiting for.
ibank, unfortunately, at this point the large HRB resource figures mean little to nothing to the value of KWK share price. As I recall HRB is valued based upon 105bcf. Now if the value was based upon 1tcf then you could assume a value of several hundred million dollars for just the HRB acreage. Point is; we just don't know the results of the confidential drill data and KWK has been tightlipped about sharing anything except the resource #. It's all about the reserve value, and how much capex is needed to bring the gas to market. If they spend $3.00 mmbtu and sell for $3.50 or even $4.00 it's probably not worth it when you add in G&A and interest etc...That's where all this infrastructure, existing pipeline, Discovery LNG etc comes into play and why I think Japan would want a stake for longer term development JV. So many variables- too many to discuss here.
From the painful lows and for well over a year I've held firm that I think KWK should be a $5-$6 stock (including HRB sale/JV) with upside potential in the low double digits IF all the moons and stars align, and Bone Springs and Wolf Camp hit oil, and Sand Wash delivers, and HRB is similar to Barnetts value etc..etc.. Regardless, at $3.00 today, I still maintain its a great buy from here until the $5 range. From then on it's anyone's guess...
However, if HRB doesn't pan out as planned, I think KWK will be stuck in the high 2's to low 3's for quite some time, and then potentially drop lower if NG prices don't recover before the 2016 bonds are due. I'm still holding long, and still VERY optimistic. I think between Monday and before Darden speaks in mid Dec we're going to see some fireworks. Time will tell....and certainly don't take what I think (or anyone on a Yahoo MB) as good investment advice.
I honestly don't know. It all depends on the terms of the deal. Maybe share price stays flat, or maybe it doubles. I think it will spike, just how high will depend on how much they sell, when they get the money, and the reserve amount/value.
Hopefully the JV news we've been waiting for. Let's hope it's comparable to terms of Barnett, which would add nearly 2 billion in immediate value and possibly more contingent upon how much of the 14tcfe resource can be booked as reserve. I'm still holding long.
Just curious, how do you arrive at the $5 figure? With almost $1.9 billion debt, the Barnett would presumably pay off $1.35 billion and the sand wash and west Texas covering near thebrest. So without HRB we are about fair value. This all based upon 1.5 tcfe total reserve. I can see you $5 figure if HRB comes in at 1billiok, and closer to $8-10 for a 2 billionbdeal similar to Barnett. Darden has told us twice HRB has parallels to Barnett.
My interpretation is KWK cannot use proceeds from asset sale to pay the 500mm 2016 debt. And they are thinking a secondary would be considered to pay that debt, on the heels of a large catalyst (HRB) when the share price is presumably much higher. But I wouldn't say this is set in stone, as if rates are still favorable they could perhaps tender the 2016 debt (like they did before) and push them out until 2019 or beyond. I don't know if that's possible or not, but I'm sure they will consider all options. If the secondary is chosen, they indicated it would be within a few quarters of the big catalyst. So some might speculate mid to late 2014 for a secondary, and one could also speculate the share price would be much higher between now and then. To me that seems to suggest this HRB event will be in the very near future. I'm still hoping for this year- like within the next 30 days or so, or possibly before Darden speaks middle of Dec. We'll see.
Don't know, don't care. Looking at this as more long-term and yes there will be fluctuations but overall trend is up.
"Substantial upside potential- HRB represents upside of 14 TFC potential"
"Sand Wash Basin and Midland believed to hold significant oil potential" That could be huge.
"CEO still owns 30% of shares of KWK"
Re HRB "at this stage we are in negotiations with select parties." Key word for me is negotiations.
Looking more promising than ever.
Go to KWK website and listen for yourself.
It wouldn't take a big fund mngr. Just a few million and start buying from here to $3.50 and the short covering stop losses would kick in. Really, it could be quick easy $$ for someone with real deep pockets. I suspect there are people searching out these low float high short interest stocks to create squeezes. This coupled with the HRB deal could cause more fireworks.
Let's see if we can get past $3 first. Remember Darden said the HRB will parallel Barnett with Toyko Gas. So the multi-tier, although not impossible, probalby would not happen in 2013. Maybe come later in 2014 or 2015? What you say makes logical sense though with tying Discovery LNG into the HRB deal. Not sure KWK wants to do this yet. Only the insiders know. We'll see.
Good idea buying the Jan $2's, I wish I had bought some. But the 10k bought this morning is a new position. If a short hedge, wouldn't they have bought a month ago when stock was closer to $2.00? I think this might be a play on the HRB JV announcement. We'll see. Would like to see KWK break $3 this week and $4 by Dec. Very possible if the momentum crowd comes aboard.
Someone just bagged a million share equivalent of KWK. Actually, it's a good buy considering it's only November and they now have two months for KWK to break $2.70 for a profit.