Thinking along those lines maybe we see a Canadian tar sand producer to make a horizontal buy of a sizeable Marcellus/Utica producer? The house passed the Keystone pipeline. It seems that might be why COG is catching a bid. Either way more Marcellus will eventually be shipping north.
Exxon is sitting like a king in front of a harem right now. If they have one problem it's that they have a lot to choose from. A triple A rating gives it around a 2.5% cost to borrow billions long term. They have billions of international cash, and billions in treasury stock. With these tools you have to think that they do some big M&A in this enviornment.
It's not nearly as dramatic as you want it to be. He will simply convert another 100k or so of B's into A's. Of the newly converted batch he will transfer some A's into his families trust funds, and then sell most of it into the open market for some cash. He has 3.8mil B's that are always freely convertible into A's. If he felt that this was wildly over priced he would be converting and selling at a rate of 1 mil per year, and bypass transfering to trust funds. Theoretically he could convert and sell all the way down to 100 B shares and still have control of the company. But he doesn't...I wonder why?
Thanks to the well timed Rampart JV they actually escaped this on the plus side. Cash in was ($2.7mil) cash out was $3.4mil. They retained much of working interest over most of the acreage with some seismic data over some portion, but I agree it has no value at todays price.
During the capital raising Rampart's management put together presentations on Alaska that now look like they belong in the museum of hype if there is one.
Get familiar with rule 10b5-1 to understand automatic sales vs. simply selling in the open market. The automatic sales are offset by exercising options a few times a year. This year all those automatic sales have been offset with exercising options of 380k after disposing 135k. His non-predetermined sales have totaled 123k this year (May, Aug, Nov)...This would equate to a 30 year liquidating pace. However, because of his options he's not liquidating at all...But no need to argue with me check the facts!
Or maybe Koch, the 64 year old founder, is selling some of that sweat equity for diversification/estate purposes. His B shares are readily converted to A shares which he sells. He has been selling on average 12,000 shares a month. With over 3.7mil shares, he's on a liquidation pace of 26 years!...I wouldn't call that a rush to get ahead of anyone.
It would be nice right now to take advantage of the market price. If they could raise a $1B in 5 year subordinated debt convertible at $100 per share for the sole purpose of buying stock today they could effectively take over 10% of the outstanding and put it in the treasury. In five years the notes would be converted into shares worth ~$200, that were bought at $60 and held in treasury. The winners of this maneuver would be the buyers of the convertible notes, and the long term stockholders benefiting from the cap-shrink. The losers would be those who sold an E&P stock that was priced at $1 Mcfe in reserves, and had an annual growth rate of 25%.
Still like the Bills myself. The weather calls for 37 light drizzle and not much wind. With the weather being a non-factor the Pack will have a huge advantage at the QB position, as oilman pointed out. However, the Bills, who haven't made the playoffs in ages, are right in the mix for a spot and should be inspired to protect the home turf against the 10-3 Pack. Over the last few games the Pack have played teams that have tried to defend the pass "two deep safety"...this week the Bills, who lead the league in sacks, will likely focus on disrupting Rodgers behind the line of scrimmage.
You make it sound as if SD rolled the dice and hedged 10x of its production before the drop...The hedges are slightly offset by something called revenue.
They have a slide that shows debt adjusted reserves per share of 47Mcfe. This was based on year end 2013 reserves and share count. Assuming 20% reserve growth, slightly lower total debt, and over 165mil shares, the market is valuing Ranges' reserves at about $1 per Mcfe. At the base of $1 after the cost of lifting and tax's, and given liquids rich uplift the net-back has to be close to $2/Mcfe, A major or mid-major has an extremely low base to attempt an offer, and capture Ranges' vast resource base for next to nothing. I think an offer at the 52 week high ($95) could get a deal done.
I bought this a couple of months back in the $73's. Since then I think it spent maybe two minutes above my purchase price. I don't mind riding this out as long as the 25% production CAGR takes over. On the other hand it may not make it there. A major could really boost its North American growth production by taking this over...Heightened TO alert here.
A lot of investors blow off impairments because they are usually small and non-cash. But in this case you could have something like a 40% of the $ asset base vanish from the book through the income statement. That would be a day of reckoning for most firms. The debt might then exceed the asset value. Good luck accessing debt or equity capital after that.
Per 10Q...At September 30, 2014, the ceiling test value of the Company's reserves was calculated based on the first-day-of-the-month average for the 12-months ended September 30, 2014 of the West Texas Intermediate (WTI) spot price of $99.08 per barrel...If WTI stays around the newly printed forward strip from now through Dec 2015 this could face a $2B handle on ceiling impairments.
I think something more in the range of TCBI is what he might be red flagging.
The dilemma here is how much time can they afford to wait for oil to bounce back. In two quarters they could out of their financial covenants and then see their #1 source of liquidity slashed. Today the 2020's (by far the largest outstanding at $1.1B) closed at $76.75. The 2020's are senior to the Halres notes due in 2017.
There's an old saying about banks being institutions that lend you an umbrella when there isn't a cloud in the sky but when it rains they want it back...Without any net working capital the liquidity comes completely from the borrowing base and the bankers who govern it. So if you were the CEO do you stand still and risk the next two quarters of sub $70 oil and the deteriorated covenants that would follow, or do you try to get liquid now by selling assets at fire sale?
The company is swimming in capital. First the IPO in Jan then a large bond issue in late summer. Production growth shouldn't be a problem. Not a substantial amount of acreage so they might have to spend a lot on additional leases and or acquiring a smaller E&P. Seems to trade at a higher valuation than most in the sector. However, that usually is the case with tightly held companies with relatively low floats...Just my take after quick glance.
I unfortunately got siked out with the pension obligation after interest rates tumbled. The underlying business is sound and throwing off a lot of cash.