The big seller showing 24 K shares on the ask a week ago, and pounding on it for days after, must still be leaning against the stock. The interesting thing about this is that if you check the NASDAQ website and look at ownership of WSCI, there are only 3 institutional owners that have 24 K or more shares: Raymond James @ 37 K shares, Renaissance Technologies @ 44.5 K shares and Barclays @ 108.9 K shares. One of those 3 must be exiting. When he finishes, WSCI should lift. $6 is too cheap for this stock. We should be in the low to mid 7s off these results.
Yep. I'll take .15, and another SA WSCI puff piece, on any day of the week that ends in "y".
Perplexing. Wonder who the seller was that tried so darn hard to exit this thinly traded stock over the last week? He sure had me spooked, convinced me we were in for store for a lousy quarter. Yep Jeff, surprise, surprise.
Been around this company long enough to know this ... it's 4:30 pm EST, 3:30 pm CST, at WSCI CFO's office. If earnings were OK, they'd have been released by now. If they stink, they'll wait until after 6:30 pm est to release ... after closing time at their offices, so they don't have to field any phone calls. It's a sure bet we're looking at yet another quarter of results that stink up the joint.
Discouraging. Someone wants out, badly. And the only conclusion I keep coming back to is that this person knows what's coming next week in the way of the earnings release. Once, just once, I'd like to see the SEC come in here and smack some WSCI people around for leaking insider info. Tired of seeing it happen here.
No sooner than I post positive comments about the direction of stock price and volume just ahead of earnings next week - a massive number of shares come on the ask. Daily volume almost 3x avg now and 24 K shares to sell just popped up at $6. Someone caught wind of the results to be reported next week - and the signal suggests we're in for another lousy quarter. It's like rats leaving a sinking ship.
In the weeks and days leading up to the earnings report, this small company has a habit of trading in the direction of the earnings. News out of this company always leaks. Always. Buyers get ahead of good reports. Sellers dump in front of poor reports. I've been in and out of this stock for almost a decade. This pattern never fails.
Earnings are next Tuesday. Notice how volume and price are starting to move higher? Hmmm, wonder what that means?
The energy biz is peanuts for WSCI. They live, or they die by Polaris. Motorcycles. ATVs. Snowmobiles. 3 Wheelers. The real question you need to be asking is how much biz does Polaris do in exports, and how will the recent, massive ramp in the dollar impact those exports? I don't know the answer, but I do know that's the key question to ask.
Beyond that, you should care about what the strength in the dollar does to WSCI's prospects to picking up future business, from anyone. Compared to a couple months ago, sourcing your parts from Europe, for example, is now 20% cheaper than buying them from US plants. Can that be good for WSCI? I don't think so.
Having said all that though, WSCI will be fine, provided they do right by Polaris. The Polaris domestic sales growth should provide enough opportunity for WSCI to prosper.
Pg 17 - Investments.
Pg 49 and 50 - Discussed in detail. Plans to drill 13 new wells in Texas.
This massive ramp in development costs will lead to lawsuits. The development expenses go into the pockets of entities controlled by J Michael Voss, primarily to Voss Oil. Mr. Voss is the main man behind the curtains of VOC. The problem is that this company was brought to the public markets with significant disclosure indicating a need to only spend $19 M more in development. That was in the 424B filing, repeated multiple times in following 10-Ks. However, they have spent $45 M, and now tell us, in the latest K, they want to spend $64 M more. Why is it needed? Reserves already exceed the minimum needed to pump under the trust terms by 30%. Unless they plan to pump more than the minimum, which they have not indicated anywhere, then this run-away development plan appears to be an unjustified ploy to line the pockets of Mr. Voss.
They need to put a complete halt to development expenditures, or justify further expenditures by indicating a commitment to pump and sell beyond the minimum.
CUE THE LAWYERS.
Cum to date = 3144
Remaining to 10,600 Min = 7456
Current reserves = 9665
Reserves vs Remaining to Min = 1.296
The net profits interest will terminate on the later to occur of (1) December 31, 2030, or (2) the time from and after January 1, 2011 when 10.6 MMBoe have been produced from the underlying properties and sold (which amount is the equivalent of 8.5 MMBoe in respect of the trust's right to receive 80% of the net proceeds from the underlying properties pursuant to the net profits interest), and the trust will soon thereafter wind up its affairs and terminate.
So, I ask ... again ... why the need to spend an additional $64.5 M in development costs ??? ... unless the plan is to pump and sell more than 10,600 before YE 2030? Ok, if that's the plan, then give us enough information so that we can place a fair value on VOC stock. Otherwise, the $64.5 M is nothing more than an effort of related parties to raid the cookie jar and steal VOC shareholders' cookies.
CUE the LAWYERS.
The numbers are fine, its your interpretation of the numbers that lie.
Thus far, the increase in reserves justifies the development costs. They paid about $9 a barrel in development costs for each barrel added to reserves in 2014. Over the life of the trust, 2011 - 2014, they have paid about $22 in development costs for each barrel added to reserves. That seems more than reasonable.
In 2014, their operating costs were $20.5 M ($15.3 Lease operating + $5.2 taxes). Divide operating costs by 744 K oil barrels, and you get $27.55 a barrel. (This calc ignores the gas).
You are correct though about this, VOC must put a halt to development costs to stay cash flow positive, have any hopes of paying a dividend in future quarters, if oil prices stay where they currently are. Your analyses, however, is a stupid as you are. If they cut development costs, then they can stay cash flow positive down to about $28 - $30 a barrel for oil, based on the math above.
You are correct again in questioning what the *$% VOC is doing with their development efforts. They already have reserves that exceed the 10,600 MMBoe minimum required to be pumped and sold under the terms of the trust. Reserves exceed the minimum by 30% ! And, they have disclosed numerous times in the past that they only needed to spend about $19 M more in development. However, they have tapped the trust for $45 M thus far. And now they are telling us they want to tap it for $64 M more! All that money goes into the pockets of related party companies. These guys are sitting themselves up to be sued.
The reserves are sufficient. If they want to tap the Trust for further development, then they need to pump more than 10,600 over the life of the trust. More importantly, with disclosure of massive ramps in development, they need to disclose how much more they aim to achieve above and beyond the 10,600 minimum. OR, the LAWYERS WILL BE ON THEIR DOORSTEP.
Wish Yahoo boards allowed for cleaner formats, but unfortunately not. So apologize in advance if the table below is difficult to read. However, this is the history of the reserves, based on MMBoe (oil + (gas/6):
Beg MBBoe 10,644 From 424B
pumped/sold '11 (554)
Added to Reserves (76)
ENDING 2011 10,014 From 10-K
pumped/sold '12 (888)
Added to Reserves 137
ENDING 2012 9,263 From 10-K
Added to Reserves 509
ENDING 2013 8,907 From 10-K
Added to Reserves 1,571
ENDING 2014 9,665 From 10-K
Couple things to note:
1. From 2011 to 14 ... 2.141 M MMBoe added to reserves. (-76 + 137 + 509 + 1571)
2. Total development costs from 2011-14 = $47.5 M
3. Divide total development costs by additions to reserves = $22.60 per unit cost to add more to reserves.
4. Thru YE 2014 - pumped/sold 3,121 MMBoe of 10,600 trust minimum, leaving 7,479 to reach minimum.
5. Current reserves of 9,665 less 7,479 left to reach 10,600 minimum = reserves currently EXCEED minimum by 2,184 MMBoe.
So my long winded question is this ... we already have 30% more than needed in reserves to pump and sell the minimum required over the life of the trust .... why then ...
at the end of 2011 they tell us they need to spend $19.9 M more in development to reach minimum
at the end of 2012 they tell us they need to spend $19.3 M more in development to reach minimum
at the end of 2013 they tell us they need to spend $23.2 M more in development to reach minimum
at then NOW WITH THIS 10-K ... HOLY CHRIST ... they drop one huge mess in our lap by telling us they need to spend $64.2 M more.
unless ... they plan to pump much more than minimum 10,600 by 2027. ????
Which they don't address, anywhere, anyhow, anyway. (CUE : LAWYERS)
This is THE issue that needs to be resolved. Resolve this, and you'll know whether this should be an $8 stock right now, or a $3 stock.
Shut up memeds. You seriously don't have a clue what you're talking about. Your posts do a tremendous disservice to all readers of this board. Either do the necessary reading and research and post facts, or go find yourself a Sesame Street board somewhere to post on. We don't need your drivel here.
For all your endless whining about development costs ... They spent $13.4 M in development in 2014. Their oil reserves increased by 1.4 M barrels (8.1 M ending 2013 - .7 M pumped 2014 + 1.4 M increase = 8.8 M ending 2014). $13.4 M costs / 1.4 M added to reserves = $9.60 a barrel
They spent $28.36 a barrel in operating costs to pump it in 2014, and $9.60 a barrel to find more of it. BIG WHOOP. A far cry from all the chicken little junk you keep posting here.
Please, just get lost. You're clueless, making a fool of yourself and doing nothing but distracting us.
Don't overlook this long sentence on Page 50 in the latest 10-K: As the cash received by the trust in respect of the net profits interest will be reduced by the trust's pro rata share of these capital expenditures, VOC Brazos expects that it will incur capital expenditures with respect to the underlying properties throughout the term of the trust on a basis that balances the impact of the capital expenditures on current cash distributions to the trust unitholders with the longer term benefits of increased oil and natural gas production expected to result from the capital expenditures.
In simple English ... After reading the 2013 10-K, you could conclude that this oil trust was a fairly simple annuity, easily modeled and valued based on just a couple assumptions. Output of 10,600 MMboe was fixed. And, they promised to spend only about $22 M more in development costs to deliver us the minimum 10,600 MMboe, by about 2030. We could argue what the market price of oil and gas would be between now and then. We could argue about the operating costs they would incur, although that side of the equation is far more cut and dry than some people on this board were trying to make it out to be. But, overall, this was a pretty simple oil trust.
Now? After this 10-K filing? NOPE. We're not in Kansas anymore Toto. They are ramping CapEx, applying new technology to existing wells. Although they don't spell it out in a clear manner, they are going to spend significantly more capex in an effort to pump more than the minimum 10,600 by 2027. Last year, the quantity pumped was fixed for the remainder of the life of the trust, but the price unknown. Now? Both of these key factors are unknown, making this much more than just a simple oil trust. We're looking more and more like a oil drilling play.
I'm not sure how I feel about that. But, given the new drilling technology that can easily be applied, maybe it makes sense? We'll find out.