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C&J Energy Services, Inc. Message Board

contrbe 12 posts  |  Last Activity: Nov 3, 2014 7:10 PM Member since: Jan 10, 2006
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  • Reply to

    Listening to the call...

    by jtbc5000 Oct 31, 2014 11:12 AM
    contrbe contrbe Nov 3, 2014 7:10 PM Flag

    True and we may be there in a couple of weeks. More importantly is how long prices will remain low and I don't think anyone has any idea. Based on comments I am getting from guys I know that work in the patch in N.D. it could be 12 to 18 months? My bet is LTS eliminates the divi by year end...

  • Reply to

    Listening to the call...

    by jtbc5000 Oct 31, 2014 11:12 AM
    contrbe contrbe Nov 3, 2014 12:24 PM Flag

    LTS is facing a huge problem if oil remains at $80 and an even bigger problem if oil goes significantly lower. At $80 oil, LTS can no longer maintain existing production levels and pay the dividend. There is just not enough money to go around (unless they borrow money). When there is not enough cash flow to do both, maintaining production levels is a lot more important, otherwise you can start a downward spiral which the current stock price has factored in for the most part.

    I think the share price would react favorably to a complete permanent stoppage of the dividend. I hate to see it go, but in all reality, a company with this much debt should have never been paying a dividend to start with. Look at it this way, if they would have never paid a dividend (saved almost $700 million) and not had to borrow that amount, their debt level would be around $800 million and they would be in a MUCH better financial position and so would the pps.

    Management has structured their business plan on high oil prices and chose not to protect the company from low prices by having in place a much better hedging program that would protect the company in times like this. This is why LTS is a high beta / high risk company to own. Management has done a very poor job of controlling debt, reducing risk and keeping costs under control. Sadly it is not a shareholder friendly company as the stock price so strongly points out.

    The only way that LTS can continue to pay a dividend is if oil prices return to 95+ in short order and stay there. If you are in favor of the dividend then ask yourself this: Would I rather receive a dividend and potentially see the pps go to less than a $1 (or even zero if oil were to stay low for many years) or would I prefer the company stop the dividend and strengthen the overall financial condition of the company? Obviously there are no guarantees the company will survive either way, but their chances are much better if they stop the dividend immediately.

  • Reply to

    Listening to the call...

    by jtbc5000 Oct 31, 2014 11:12 AM
    contrbe contrbe Nov 1, 2014 10:51 AM Flag

    I think the dividend use to be primary reason shareholders invested in LTS, at today's pps (and risk of the dividend going away) I do not believe that this is the case. Oil prices will dictate the pps until they cut their debt in half, unfortunately they may not happen anytime soon. For the last several months, the stock price has been primarily controlled by short sellers and HF trading software. They are able to manipulate the price up and down as they so desire.

  • Reply to

    buyout comming?

    by kajacobson55 Oct 30, 2014 2:20 PM
    contrbe contrbe Oct 30, 2014 3:49 PM Flag

    LTS reduced their debt by $750 million this year (more than current market cap of the entire company)and have been taken behind the wood shed ever since. They have plenty of additional acreage that they could sell to lower debt by another $700 million. I am not sure that is a good idea,,, pps might go to $1 .

    I still think this is a coordinated "fear" attack to allow the big boys to make a ton of money on the short side and then buy a large amount of oil related companies at a massive discount so they can sell it back to you for a huge profit. Oil is not going to stay low for very long and nobody on Earth can predict the price of oil 3 to 6 months from now (just look at their past track record). The world consumes close to 100 million barrels of oil every single day and China and India are just getting started.

  • Reply to

    No Light At The End Of The Tunnel

    by achilles197474 Oct 30, 2014 10:13 AM
    contrbe contrbe Oct 30, 2014 10:34 AM Flag

    I don't think Canadian companies are getting hurt as bad as most think (at least not yet). The weak Canadian dollar and strong U.S. dollar means that Canadian producers will receive $90 Canadian dollars (less differential) for oil sold at $80 U.S..

    http://www.nasdaq.com/article/follow-a-guru-into-this-hated-but-profitable-sector-cm407840#ixzz3HdM19vU7

  • contrbe contrbe Oct 16, 2014 10:00 AM Flag

    Also remember that oil is priced in U.S. dollars and at the current exchange rate, LTS receives $90 CAD for a a barrel of oil priced at $80 USD.

  • contrbe contrbe Oct 15, 2014 3:29 PM Flag

    I have already sent an email suggesting that at this ridiculous price they should stop the dividend and use that money to buyback shares. At the rate this is going down, an investor is losing a year of dividends every day, so apparently the fact the company is paying a dividend is doing absolutely nothing to support the pps.

  • contrbe contrbe Oct 15, 2014 2:33 PM Flag

    It is easy for the big boys to manipulate a low priced, low volume, high beta stock... specially one that is in the business of drilling for oil during a time of fear, crashing markets and a sudden large drop in oil prices. Unfortunately LTS was not very smart and looks to have chosen not to hedge a significant amount of their production for 2015 and beyond. They just came out with their October Corporate Presentation and their hedge strategy is not very good.

    I am sure that LTS can survive a year or two of $70 to 80 oil (assuming oil stays low for that long) but that sure won't do much for their pps and it will not be easy. They have the ability to cut the dividend, reduce capex, layoff non-essential employees and continue to produce a minimum of 30K per day for a another two years. If oil was to drop below $75 for several years then they would be in trouble and might be forced to sell the company. That is a worst case scenario and we are no where close to being there.

    Currently LTS is priced for wholesale bankruptcy and that is not going to happen anytime soon. Even in a very depressed oil market (which we are not in), the company is worth $8.50 a share including assumption of debt. LTS sold approximately 20 percent of their undeveloped land and about 15 percent of their production this year and received an amount equal to the current market cap of the entire company (not including debt). They still have 670,000 acres of undeveloped land.

  • contrbe contrbe Oct 11, 2014 10:31 AM Flag

    That is the game (Fear Game) that is now being played. They are wanting to scare as many investors as they possibly can into believing that oil is going to $60 and the price will remain low for years.. The problem I see with this is at least 75% of the oil producers in this country will stop/reduce drilling and shut in wells once oil reaches $75 for any extended period of time. Once this happens, it does not take long for prices to go back up. The U.S. consumes almost 19 million barrels of oil a day and it is highly unlikely consumption will go down, especially if oil prices continue to drop.

  • Reply to

    pps

    by cashewking05301 Oct 1, 2014 3:58 PM
    contrbe contrbe Oct 3, 2014 1:28 PM Flag

    I agree...

  • Reply to

    Gonna sell more shares and cut dividend

    by murphylogic Oct 3, 2014 11:49 AM
    contrbe contrbe Oct 3, 2014 1:23 PM Flag

    They are in better financial shape (after reducing debt by 3/4 of a billion) than they have been in a long time. Three things are happening here.

    1. Stock is very easily manipulated and has become a favorite of the shorts and computer programs.

    2. Oil prices are down and all of a sudden everyone thinks the Earth has more oil than we will ever use.

    3. Going forward, Lightstream's production growth is going to be quite a bit slower than many had originally anticipated. The growth investors are bailing out and of course as panic sets in, many others panic and jump out the window as well.

    At this point they need to cut the dividend to zero, figure out what went wrong with the Swan Hills wells and if the Swan Hills is not economically viable, get rid of it and move on. In the meantime, they will continue to to produce 38K to 40K boepd with moderate growth going forward..

  • Reply to

    pps

    by cashewking05301 Oct 1, 2014 3:58 PM
    contrbe contrbe Oct 2, 2014 7:37 AM Flag

    John Wright's Lightstream Resources Ltd. (LTS) lost 49 cents to $4.76, its lowest level ever, on 7.77 million shares. Its only news was that it has closed the $378.4-million sale of its conventional assets in southeast Saskatchewan to Crescent Point Energy Ltd. (CPG: $39.54). This deal marks the completion of its $600-million asset sale program. In fact, Lightstream has sold $729-million of assets since it announced this program in late 2013, bringing its debt down to $1.5-billion from over $2-billion. Now the challenge is to keep the debt from springing back up. Long-time investors will remember that Lightstream undertook a very similar debt-reduction program in 2012, right down to selling assets in Saskatchewan to Crescent Point (for $427-million that time), which brought its debt to $1.4-billion from $1.8-billion. That amount more than regained its ground by the end of 2013. Lightstream would probably say its situation is different now because it has narrowed its focus on the Alberta Cardium and Saskatchewan Bakken plays, which are benefiting from new technologies that improve production while lowering costs. Investors seem skeptical. Another factor behind today's drop may be nervousness that the company will cut or eliminate its four-cent monthly dividend, which yields 10 per cent. TD Securities analyst Travis Wood raised this spectre in a research note this morning, calculating that eliminating the dividend would save about $96-million a year. He said this option "could be viable given we do not believe that the stock is being rewarded for the yield." He also said Lightstream could be a good takeover target, allowing investors to take his recommendation as positively or negatively as they like. They seem to have come down firmly on the negative side.

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