Why would you guys even worry about nonsense like that? This is such a solid company. Strong cash flow, great balance sheet, great management, current on SEDAR filings in Canada, good Board, proper auditing, no big legal issues, etc. There are some stocks I lose sleep trading. This isn't one of them.
Olejos, looks interesting. Will check it out. By the way you are NOT off-topic. They just completed the Miller well and this is the Miller message board. Better reflect on that one, message board police.
Vancouver, British Columbia / TNW-ACCESSWIRE / May 21, 2014: Avanti Energy Inc. (TSXV: AVN) ("the Company" or "Avanti") is pleased to announce its recent success in establishing commercial production from the VUA Miller #1 Well. After a week's production, the well has averaged 196 barrels of oil per day (bopd) and 246 mcf of gas
Listening to Foulger is like listening to Russia claiming that they did not invade Ukraine. I wonder how enrollment for his Fall Propaganda 101 Course is going. Lots of left wingers no doubt at that 3rd rate community college where he teaches. Course should fill up early.
It is obvious that PR has no case. They made a political decision to try and stiff DRL out of a legal agreement which is now backfiring resulting in much worse payment terms than the original agreement. Arrogant politicians figured they could get the lawyers to come up with "something" to justify their political decision. PR has lost every battle in court. Their arguments show a childish sense of arrogant govt entitlement. Their lawyers might as well have showed up in court and argued " Your momma!".
There are a couple of incentives that are typically used to entice debt holders to take a voluntary swap. New debt can be secured or more senior. That puts holders that don't swap behind holders that do. Not sure how they could structure that type of swap for DXM.
With regards to the publicly traded bonds, perhaps they could offer to swap some of those for common stock or convertible debt.
The Value Digger article is pretty good. Picked this one up as a Panick Report pick at lower levels. Still way undervalued though.
If the market was always correct, I wouldn't bother to trade. There are a lot of reasons for the discount (although they are fast disappearing). Trades primarily in Canda as PTA.V (ptaxf is the pink sheets for US investors). Stock price is too low for US investors and they will do a reverse split to remedy that. In Canada it trades on Venture exchange rather than the more respectable Toronto (probably will move there within a year). It was a smaller company, but is growing rapidly with the Suroco merger and active drilling. It was very depending on production from 1 oil field, but is becoming larger and more diversified rapidly. There were some community issues (famers blocking roads) for some of their fields, but those are becoming less of a factor. There were security issues in some regions of Colombia but FARC is being routed by the army and is negotiating a peace treaty. Sector is out of favor, etc.
My newsletter and email alert service (Panick Value Research Report) is focused on undervalued off-the beaten path micro caps like PTAXF and microcap distressed debt issues like the DRL pref issues. Yahoo mail mrpanick if you want a copy.
No positon in the DRL common or the BPOP issues. Still have a little bit of the DRL pref issues since I think there will be a swap offer. I have traded the BPOP preferred issues and successfully traded BPOP puts (although not lately). Let me let you in on a little secret about BPOP. You can't just go by their direct exposure to PR muni bonds, PR direct govt loans and development loans guaranteed by PR. That is just the tip of the iceburg of their exposure. If PR defaults, don't you think all real estate there is going to take a dump? How much indirect exposure does BPOP have? A lot. When Greece went down it effected all the Greek banks. PR is the same thing.
I track the PR Govt Development Bank bonds for an advance warning of a PR default. If the muni bonds dump I buy BPOP puts to make money and hedge my DRL pref position. I wouldn't sleep well owning a big BPOP position with muni bonds trading near 70. If you want a better long term holding try PTAXF. Great balance sheet, great management, growing fast, trading at 1/3 of peers (which are themselves undervalued) and making money hand over fist.
I'm no lawyer, but I've worked with lawyers on some cases for a former boss who was involved in a lot of litigation. Trying to sue a government or regulatory entity for damages is a losing battle. Think it's called sovereign immunity. They are essentially immune from that type of lawsuit. DRL can't sue PR for damages anymore than a family can sue "The Liar in Chief" because he promised that health care costs would decline by $2,500 for the average family if the Unaffordable Health Care Act was passed. You can't sue because you liked your doctor & old health plan and can't keep them. Now if a corporation acted in such a bad manner, they would be sued endlessly for false advertising and various other offenses. Hacienda is virtually immune. The best DRL can hope to do is recover the money they've stolen.
I hate to doubt the great Bloomberg, but I think they are likely to sell the NPA's in PR and keep the "good bank there". Then again, you never know. They could sell the profitable mainland US assets and back out of the PR sales altogether. I wouldn't bet on the vultures Red. There are plenty of buyers for the profitable mainland US assets and Wells Fargo (King of the jungle) may yet eat their meal.
dtj, yes of course they would sell the tax certificates. Yes of course a buyer would want a discount in part because they would offset taxes over 7 years so net present value is lower than face amount. 125 - 175 mil cash sale for a 276 mil face value settlement seems about right to me. I assume you would agree that the FDIC would accept cash in tier I capital - LOL.
I agree with you Frontline. The negotiated settlement for essentially full value paid over 7 years shows that PR has no case and they know it. Political rhetoric doesn't fly in court. DRL is within their rights to just demand the cash instead of worrying about PR's cash flow issues and giving them a break on timing. If PR needs legislative approval to get a break on the timing of payments, then that's their problem.
The proposed settlement according to the Bloomberg article was worth up to 276 mil over 7 years in tax vouchers. Let's say they had closed the settlement and then sold it for about 150 mil in cash. That would go a long way. However, they also want to sell "bad" assets in PR at a loss. To do that they would need more capital. Selling mainland assets would help. They could also do some type of capital plan where they sell common, voluntarily offer to swap preferred for common and voluntarily offer to swap holding co debt for common.
I think in a year or so you could see a much smaller, profitable bank that has a much larger common float and is profitable (as it will be if they get rid of the NPA's). The biggest threat to DRL shareholders is dilution IMO - not an FDIC seizure as all the BPOP vultures seem to think.
Hey Jude, it has a few elements that you might see in a "pump and dump" but is a legit company. Some of their pref stock had abusive terms, but most of that has been converted to common. They got listed on the NASDAQ small cap and had a top tier accountant when they were listed in Australia. They are current on SEC filings. Yes, their are some fluff pieces coming out, but compared to many of the solar stocks you see this one is very legit. The folks who bought the secondary at $4 are down, but not a bad entry point below $3. Does have more revenues than most solar plays and has done many real large scale projects as well as 17K retail solar installs.
Slight correction on PTAXT (Petroamerica). Forgot they do have 32 mil in debt, which is nothing though for a company with 65 mil in cash, a 250 mil market cap (even at a depressed stock price) and 40 mil in operating cash flow every quarter. If you lost some sleep worrying about DRL (anyone who owns DRL is well advised to lose sleep watching it every second), PTAXF is a good stock to own. Check it out. I'm big on the energy sector lately. Not much fun in banking anymore. Also like CBDE (microcap retail solar play, but you might lose some sleep owning that one).
You do good research. BPOP isn't going to get DRL for free and the vultures that own that stock are in for all the excitement of watching paint dry. My biggest holding is PTAXF and you should check it out. It's a Colombian oil company that trades in Canada as PTA.V and on the pink sheets as PTAXF. If you want to sleep at night, they have no debt whatsoever, very strong cash flow and 65 mil in cash. They are growing rapidly, have great management, doing some exciting deals and the stock hit a 52 week high over the last few days. It's still trading at only about 1/3 of what larger peers are trading at though and has plenty to run over the next couple of years even though people are starting to jump on the bandwagon. Enterprise Value / Cash flow is less than 2X which makes it one of the cheapest stocks you will ever see. Some discussion in yahoo and a lot in stockhouse. The recent Suroco (hitting huge wells) merger was a big plus and I was fortunate enough to have Suroco as well.
Low tax rates and favorable oil policy in Canada and Colombia. What's a few FARC terrorists (in some areas, being routed by the army & negotiating a peace treaty anyway) between friends. Farmers (who tend to block to block roads to oil fields with their trucks when they are unhappy - which is most of the time apparently) are actually a much bigger threat than FARC. Colombia just bought off the farmers with a huge farm bill though.
There are a few things to look at:
1. Balance Sheet
Balance sheet was a mess, but has been cleaned up a lot lately. Still some problems such as preferred stock with abusive terms, but moving in the right direction.
Hey, it's trading well below the recent secondary at $4. It might have been a scam for those who paid $18 - but not so much at $3. Cash flow is still in flux and the business is in transition. Is trading at less than1X revenues. Cash flow multiple probably isn't right metric at this stage. SCTY is at over 25X revenues.
Company does have some real experience with solar and wind and has done some real projects.
4. Listing Move
Listing more from Australia to US is very favorable. Many US investors haven't found it yet. Australia is not exactly the ideal listing location for green energy companies these days.
I think the licensing deal with Westinghouse adds a lot of credibility and gives them a nice market niche (20 year guarantee for people who want to own instead of lease panels). 3rd party customer financing is a plus. US operations are still tiny, but they have a brand and proved them can install in other markets.
So why is retail solar better than large scale solar projects? Simple, there are higher subsidies for it. $4,900 just from the fine Delaware taxpayers (suckers!) for putting solar panels on my house. So would they pay twice as much for a 15kw system or 100X as much for a company doing a 750kw system? No, not at all. The subsidies, grants & various other "free money" are being doled out the most to small retail installations. It's about politics - not economics.
It "should " make more economic sense to do a large installation than to manage hundreds of small projects putting panels on individual rooftops. However, the profit margins are far higher for retail solar. I also have to say that it's nice to know you will have some power (at least during the day) even if the whole grid goes down due to a terrorist attack or something like that.
This is a company in transition. Let's face it, Australia is not a great place to list a "green energy" stock or do retail solar systems. CBDE is correctly focusing more on the UK and the US. Electric power prices are sky high in the UK and hitting records in many parts of the US. How dumb are we to shut down all the coal, nuke and oil generating plants? Pretty dumb, considering the 15+ year "pause" we've had in "global warming". But hey, I'm here to make money not debate scientific facts such as the fact that "global warming" models have failed to match reality. Australia has wised up and is focused on lowering electric rates. The UK and US are doing everything possible to raise electric rates and subsidize solar. I think it's a mistake, but might as well profit from what you can't change.
I live in Delaware. Just signed a deal with another vendor (private company) to put solar panels on my house. Solar City is trading at about 25X revenues. This one is less than 1X revenues (even if you add the net debt to the market cap to get the enterprise value as another poster failed to do).
If everything was equal, than natural gas would be a cheaper way to generate electricity than solar power. However, the playing field is not level. Power companies are heavily taxes and regulated. DE is paying $4,900 in grants to put a 7.5KW system on my roof. That's on top of federal grants, selling carbon credits and all types of other nonsense. It's a ridiculous waste of tax payer money, but I might as well take the money before they give it to the next guy. Ends up costing me about 11.5 cents / kwh for solar vs about 14 cents for Delmarva power (including transmission charges). Lower rate gets locked in for 20 years with solar, while Delmarva will keep raising rates. Solar should not be cheaper, but it is. Time to take solar stocks like CBDE seriously. Believe me, I'm no bleeding heart "green energy" freak. I'd but a coal plant in my backyard if it would save money.