Armen emphasized today in his EnerCom presentation that the mobility of the oil is the key result of the test, not that they only produced 6 bopd. He did an excellent job again explaining the implications and significance of what has been accomplished over the last year.
I'm sorry to say I heard nothing new, particularly about their most critical need--additional financing.
No, I was impressed by their production gains and confirmation they can be c.f. neutral in 3Q and positive in 4Q. However, you cannot embellish the story at EnerCom next week without making the same statements today and therein lies the problem in my view. This stock has traded poorly for months and simply has trouble holding its gains despite the obviously improving story.
But when you won't talk averages or projected 3Q exit rates you don't give anyone anything to hang their hat on or reason to buy the stock. They are playing everything so close to the vest now and working simply out of their checkbook I wonder why they they'll spend the money to go to EnerCom next week? The NAV argument for stock purchase has been discredited for quite a while now.
If the GOM is quiet again for storms through November, Q3 should further bolster the notion the bottom is in and operations can cover debt service and maintenance capex.
There was a lot of action in the weekly $36 calls today on the buy side. Folks paid 35 and 40 cents for a two day option.
Pay attention to the Delaware Basin wells in Reeves County, rutlando.
Nice try on the 100 share tape paint for $49.75 at 19:23 pm , by the way.
Gas Market Not Cooperating With Gas Growth
Strategy; Maintain Underperform
■ Maintain Underperform. SFY delivered stronger than anticipated 2Q14
results on better gas realizations and lower operating expenses, and while
we increase our 2014/15/16 EBITDAX estimates 10%/4%/7% primarily
driven by higher natural gas production, we still foresee SFY having a tough
road ahead digging out from its leverage burden with limited core inventory.
As such, we maintain our Underperform rating and $10 target price.
Delivering Gas Growth in a Weak Gas Environment. SFY gas production
surprised to the upside in 2Q14, as the company focused on high-rate gas
well development in its Fasken area where interuptible pipeline capacity
became available during the quarter. On the back of strong results in Fasken
the company increased 2014 production guidance 3% at the midpoint to
32.5-33.2 Mboe/d, driven by an 8% increase in gas volumes offset by
respective 4% and 1% decreases in estimated oil and NGL volumes. SFY
also introduced preliminary 2015 production guidance of 34.5-36.2 Mboe/d,
a ~7% increase at the midpoint which the company anticipates it can deliver
while spending more in line with cash flow. The company will remain focused
on the area with its recent JV with Saka Malyasia completed and additional
firm transportation agreements increasing capacity to 160 MMcf/d gross in
■ Valuation. SFY is trading at a 12% premium to our ‘PD-Plus’ NAV vs. a 12%
discount for its peers. On multiples, SFY is trading 4.5x and 5.4x 2014E and
2015E EBITDA (unhedged at futures strip) vs. 6.5x and 5.9x for the peer
The last trade tonight in the late session was at $21. If only we could move on from there tomorrow, but a tiny voice whispers to me, "fat chance."
Credit Suisse repeated their Under Perform this morning in a follow up note to the conference call and that caused the weakness at the open. Nice contrarian buy.
Nice re-entry price. The Street still has little respect for the NG space and anybody whose growth is coming from there. Funds will buy again here during the shoulder season as a bet on a cold winter.
Management remains too top heavy here, too expensive too maintain and should have articulated on the recent call a better strategy for doing something to enhance the LA liquids production.
Tunnels have been discovered under the wine closet in the Houston board room which lead directly to Schiller's private space in the garage. SEC commandos are rumored to be on the way there now with yellow tape. Sell now
When Keith got fed up because he couldn't get inside the black box, you had to suspect there is trouble behind the curtain. There were 1.004 million shares sold in Canada today. The buyers had to be hearing something from DD that the public simply is not privy to or the price this afternoon would have been worse. This is no way to run a public company wherever it's listed.