Midwest propane stocks measured 22.69 million barrels in the reporting week October 25, the lowest level since the corresponding week of 2004, data released by the US Energy Information Association showed Wednesday.
Propane demand has been strong in the Midcontinent amid crop drying and heating demand.
Crops such as soybeans and corn can either dry naturally in the field or mechanically in a crop-drying furnace prior to storage. A robust, late and wet crop harvest has resulted in a surge in propane demand for crop drying, according to sources.
Analyst Peter Fasullo of EnVantage estimated that 400,000 b/d of propane could be consumed over a 30-day period of crop drying this fall.
The key is 475 potential new drilling sites and 79% oil.
Equal has 40-50 potential new drill sites and 5% oil (both are approx. figures).
It is only worth what somebody is willing to pay.
August 28th: Chairman Michael Doyle sent letter to multiple interested parties and they were requested to submit expressions of interest.
September 6th: Received a revised $4.85 cash offer from Montclair.
November 18th: Strategic alternatives process was successful, resulting in a suitable option. Currently pursuing exclusive negotiations "as the terms, conditions and structuring details are being finalized"
If I read between the lines and hear "structuring details" that seems more like a merger or buyout with shares than a cash buyout.
My guess is $5.80. Why?
They turned down $4.85 as inadequate, came out with reserves 20% higher, so you would have to think that since they found a good offer it would have to be 20%+ more than $4.85.
How do you know it is a public company?
Yesterdays trading price or tomorrows trading price wont have an impact on buyout price.
I think buyout price has already been set and just going over last few details before it is finalized.
Doesn't look like NSLP is a buyer. This is from their latest conference call. Seems they will get property from parent company.
So when you look at the inventory we have in our books, we have four plus years of drilling inventory on the NSLP books. And additionally, we have lot of drill bid inventory at the parent. So from the perspective of having to go to do acquisitions, third-party acquisitions in order to deliver both maintain our production profile and deliver growth, we’re fortunate enough to have that in house. So we are not forced to do it.
We have identified some opportunities. And if we can acquire them for the appropriate price, we will, but we are very much focused on being a development company with the asset base we have on hand and within our control.
Totally agree with you. There has been plenty of time for somebody else to step up with an offer. And none has done it. And yes there were quite a few companies looking at the books. Right now the company is worth $4.85 as that is the best offer.
My concern is how financially strong Montclair is. I just don't know how deep their pockets are and if they are trying to do a 100% financing to come up with the cash. How much more equity do they have to put into the buyout?
I am in the same boat with you. It has been over a year with multiple investment bankers working on the strategic review and only ONE offer has shown up. There has to be a reason why that we dont know about. I will take best offer and move on to something else. You have 3 each 5% holders and I am sure they will take the money and run elsewhere with it. Plus lots of volume in past few months in the $4.50-$4.70 range. What is the thought process of these buyers? Are they long term holders looking for $7+ or are they short term traders looking for a revised offer of 20% higher than the $4.85 since reserves went up 20% from the time that offer was made? So maybe a revised $5.50 offer from Montclair????
Yes, there were multiple parties that had access to data room earlier this year.
I think the chairman of the board even said something about "time for them to make an offer if they want'. So yes, why no other offers?
The company is only worth what somebody is willing to pay for it, not what people think.
Sounds like the typical homeowner. Thinks house is worth $500K and puts it up for sale for $500K. After 6 months best offer is $400K. What is house worth?
Same for Equal. I have heard on these boards that company is worth $5.50 and even some saying $7-$10. This company has been in play for a year with a couple investment bankers shopping the company around. Multiple parties have looked at the books in the data room. Right now the company is worth $4.85 because that is the best offer so far.
If propane goes to $2, then company may be worth a lot more, but that is not now, that may happen.
Small float, illiquid I just don't think this thing is shortable.. CC said disgruntled ex employee. Could also be somebody trying to accumulate shares cheaper.
FY 2nd Q still has too many moving parts for me to get a good handle on earnings. You have costs of winding down India, costs of consolidating China, costs of Brazil. I am sure there are some investment banking/legal fees with refinance. Plus more costs you would have to dig and find out about.
Here is Q revenues for last 5 quarters. $23,499, $24,439, $23,399, $21,737 (first Q of FY 14 was a real disaster) and now $24,639.
So I think when they report 3rd Q it will really tell the true story. Did they delay some 1st Q sales to 2nd Q? Or are they really ramping up revenue growth and replacing lost sales from Dupont and Brazil.
If they can report revenues of $25.5 million for 3rd Q then we know they are on track (CC did say that sales so far are on target for 3rd Q). Plus a lot of the one time gains/losses wont show up so we will have a better idea of margins and earnings power.
Hunton Limestone Horizontal Oil Play
As of June 30, 2013, Gastar held an interest in approximately 300,300 gross (183,400 net) acres in Major, Garfield and Kingfisher counties, Oklahoma , including acreage acquired from Chesapeake Energy in June 2013 (Click here for more information on the Chesapeake transaction). Our objective is to develop a low-cost, repeatable horizontal drilling program to develop the conventional oil-bearing Hunton formation. A portion of our Oklahoma acreage position is being developed through a joint venture with a third party operator that consists of three Areas of Mutual Interest (“AMI”).
On July 2, we announced that we signed a purchase and sale agreement (“PSA”) with an undisclosed third party for the sale of our interests in approximately 76,000 net acres in Kingfisher and Canadian counties, Oklahoma. (Click here for more information on the pending transaction) We believe the acreage to be sold is less prospective for oil production in the Hunton Limestone formation and offers us the opportunity to monetize a portion of our earlier investment at a very attractive valuation. This transaction is expected to be completed in the third quarter of 2013. After completing the pending transaction, Gastar will own an interest in approximately 136,800 gross (96,400 net) acres in Oklahoma.
In 2013, we currently plan to drill approximately 12 wells in Oklahoma, including operated wells on the newly acquired acreage and several non-operated wells with our partner in the AMI. We expect the first well in the newly acquired acreage to be spud sometime in the third quarter. Our Hunton Limestone horizontal wells are expected to be drilled with 12,000 to 13,000 foot total measured depths including 4,000 to 4,500 foot horizontal lateral sections, with gross drilling and completion costs of approximately $5.2 million per well.
I don't have the time to do all the math.
Equal has "hunton" assets primarily in LIncoln and Logan counties. Maybe 50/50 mix of NGL/natural gas. Not much oil (don't know why).
Here is press release from Gastar (GST on nyse).
HOUSTON, Sept. 5, 2013 /PRNewswire/ -- Gastar Exploration Ltd. (NYSE MKT: GST) today announced that it has signed a purchase and sale agreement to acquire a 98.3% working interest (80.5% net revenue interest) in 24,000 acres of the West Edmund Hunton Lime Unit ("WEHLU") located in Kingfisher, Logan, Oklahoma and Canadian counties, Oklahoma. All of the acreage in the unit is held by production ("HBP") and located nearly adjacent to a portion of the Hunton Limestone assets that Gastar acquired earlier this year from Chesapeake Energy (see attached map). The transaction purchase price is $187.5 million, subject to customary closing adjustments, with an expected closing date in late November 2013 and a purchase effective date of August 1, 2013.
The property currently produces at a daily net sales rate of 1,200 barrels of oil ("BO"), 2.7 million cubic feet of natural gas ("MMCF") and 428 barrels of natural gas liquids ("NGLs") — or 2,078 barrels of oil equivalent ("BOE"). Based on Gastar's internal estimates, total proved reserves are 11.1 million BOE, of which 66% is oil and 43% is proved developed. The estimated present value of proved reserves (discounted at 10% using NYMEX futures pricing as of August 28, 2013) is $191.3 million.
Looks like they are paying about what Equal is currently worth (but this is more oil weighted).
11.1 million BOE of reserves versus Equal's 24 million BOE of reserves.
2,078 BOE per day versus Equals 6,400 BOE per day.
Is there that much value discrepancy for something with 66% of reserves oil?
How come Equal cant find OIL!!!!!!!! and they can?
I agree. This company has been "shopped" around by plenty of investment bankers both last year when they were selling assets and now when they "opened" the books and a number of companies looked at them. If no other offer comes along besides Montclairs, then I will sell out and just find another cheap company with shareholder friendly management.