Correct if im wrong but before Yahoo added thumbs up/down the level of on topic discussions has nose dived. I suppose a childish feature will bring on childish behavior...Several really good level headed posters have disappeared.
Strange deal to say the least. The premium (a measly 5%) comes from the conversion factor that KOG holders will convert their shares to WLL. However, $13.90 is still below the $14.23 Friday close. I doubt that this is the type of buyout that would move MHR or any E&P of its size tomorrow.
The bond markets response to the "too much debt?" question...The 2020 maturity trades at $111.25 yields 5.75% or 400 basis points below coupon. Taping a strong bond market to take out the C and D looks like a good way to clean up some complexity and lower the capital cost. At least in theory.
However, Royale still has 100% on over 40k/acres. Royale still has roughly 55k net acres to Rampart's cap of 37k. Also assuming big success Royale has a original $1.6mil equity option on Ramparts shares...The best way to play this is with Royale...CASE CLOSED!
"Could"...the entry cost was $100/acre and thanks to the JV the cost basis is 0. Let a big player lift the O&G...it's early mineral rights that make quick fortunes in this business.
The last one pictured a stalking Leopard. I think this one will be a hard charging Grizzly.
The option expired yet Royale is either at the table listening to Rampart make a pitch for better terms, or Royale is at the table negotiating a better package in order to squeeze another payment from this struggling entity? Either way Royale really ought to let it go and let Rampart pull together so it can use its resources on next years drilling and completion of that well...far more important!
Pipeline should be a marketing cost not F&D. This equation should simply be all cost leading up to booking reserves (leases, seismic, exploration drilling...) divided by the additional reserves that matched those cost. Key word MATCHED! Credit Suisse clearly has better access to internal data, but I wonder if they didn't just use the "quick and dirty" method by taking E&P capex and dividing by reserve additions...Either way I don't think Gary will be using this slide with a Wolf licking its chops in the background on the next presentation.
I think the graph is a product of timing. The bottom of the list has several companies that over 2011-13 that have sold significant producing properties, and used the cash on development of other plays. The result is a higher numerator over a flat denominator. At the top of the list are companies that have generally stayed put so their F&D is flat but production is growing...Strong names at the bottom. It wouldn't surprise me that a lot of those names on the bottom make it to the top on the 2016 list.
Right off the bat the article says Magnum's ebitda trails the debt load by 70x. And then says the industry average is 4x. The article isolated MHR amongst the Exxons, and Chevrons of the industry, rather than peers closer to its size. Also don't expect Bloomberg to mention that MHR expenses exploration cost on the income statement in one period, while most of the peers do it on the balance sheet over time. This has a dramatic affect on the income statement...If MHR drills a $10mil well that $10mil is expensed and shown on the next reporting statement. If MHR were to account that same well under the full cost method the $10mil goes into a cost pool and is expensed through DD&A over several periods. The difference could literally drop a few million onto net income and show MHR being profitable...like Halcon.
Not accusing anyone of whining, and I get the frustration of those who bought in April-ish of 2011. I just have a hard time knocking a stock that has returned 30% CAGR from the beginning. There may be a variety of reasons why the stock has stumbled since 2011. My opinion is the Baytex deal put too much leverage on the balance sheet and ultimately had to sell EF to avoid bankruptcy. I think when they sell Eureka, as he said they will early next year, and if its a cash deal, the market will respond with thunder. It makes sense because Eureka and take-away remains, operated by another, but MHR would have a boatload of cash plus capex diverted to D&C.
I just looked at a chart comparison between MHR and COG, and I didn't see COG in any time frame sky rocket over MHR...not in the past 6 months, not two year, and absolutely not the five year, where MHR has outperformed COG by 3x. Unless you like that 8/cent dividend that COG pay's I'm not sure what you're beef is?
The mark of a superb company might be a quit message board...Something is a little off, when a company that has declining volume growth (TAP) is priced exactly at the same EV/EBITDA as a company with growth and a lot more run-way, as is the case with SAM. The recent trajection of TAP has been fueled by investment banks upgrading the stock, which therefore give's TAP's executives currency for M&A...and which gives investment banks fee's that carry very high profit margins. Clearly SAM doesn't need M&A for growth and so we don't have the same relationship with Wall St. However, for proper valuation, either TAP needs to reverse a bit or SAM should be over $300...Just my opinion...Cheers, and have a great summer!
It's probably better to ask "Kip" Ferguson. This seems to be the project of Eagle Ford Hunter Pres, who doesn't have much to oversee since the EF sale. It's a way for Evan's to keep a trusted lieutenant on board, and thus far hasn't cost a dime in liquidity.
The executives are boosting their holdings. Selling 50k in the open market to fund an exercise of 200k.
String, Other than from hearing on this board that Rampart's stock hasn't been moving, I have not followed Rampart of late. It could be that Rampart may opt not to exercise the central block. If that's the case Royale retains over 60k net, and still has a negative cost basis on the acreage position. The option values the central block at $100/acre. I would prefer that Rampart passes on it. If this acreage were to get half or a third(~$10K/acre) of the values that the some of the lower 48 plays have gotten in recent years, would put a value of $600mil or $40/per share. Laughable as it may seem this IMO is not too far from a possibility.
Rampart can purchase 75% WI on the 17,000/acre central block for $1.7mil. If they do this will bring in a total of $5.1mil from the JV. The central block option along with Rampart drilling and completing two wells by April of next year would effectively give Royale an average acreage cost of MINUS $45/acre on the remaining 52,500 net acres. If the play does nothing going forward, Royale still will have done very well. If however, the play gets hot you can't beat a $50 million market cap that holds 52,500/acres at a cost of MINUS $45 per acre.
He skewed the post so he could get the word myopia in. It was beyond a reach. He seems to be the typical judgmental type, where he is doing the same exact thing that he accuses another of doing. In this case it's being a short-term trader-not an investor...Wasn't he bashing Evan's and MHR a couple weeks ago?