Not often that 12% dilution leads to a higher open. Nice to see CS confirm their $9 target. It's getting tough to value this stock.
You hit the nail on the head. The spike to $4 was generated by momentum traders, who's holding periods are hour's if not minutes-even in the heat of the moment selling to them was the wise move. So going forward in the next days to weeks the real DD players are going to have a chance to take a look and decide if it's legit...the Petroleum news article, along with news blogs on O&G Journal can go a long way in bringing this potential to the serious O&G investor and executive alike.
Just spent the last 40 seconds reading your post history. Just a bunch of quips and snarls from a little man who doesn't understand business, risk or the stock market...If you're not too lazy you ought to LEARN, or go snarl on a topic you understand better, and don't forget your purse!
If we're to assume that this conventional target is a pool and give it a modest depth of 500ft, the oil in place would be roughly 166 million barrels. Even if just half of that is recoverable it would be a big find for a billion dollar E&P. Instead this would be shared by two entities with a combined enterprise value of $80mil. Essentially this would mean that between Royale and Rampart the finding cost of 166 million barrels is less than $0.50/per barrel...Wall St and other E&P's are bound to take a further look at this news release and if the chance becomes slightly greater than remote the two stocks would go absolutely parabolic.
Yesterday as the float turned over June $3 calls became liquid enough to short, which I did at .4 against my shares...It's early, but it may have been a rare stroke of genius on my part and I could get my average to $2.35
Over the past six months Tap shares have outperformed Sam by 30%. Even as Taps volume growth is flat analyst have upgraded the stock due largely to financial discipline. However, this performance has lead to some key valuation metrics between the two companies to close. First note that Tap is a financially levered firm while Sam is not. And Tap relies on acquisitions to grow, while Sam grows internally. So the comparing metrics to date are EV/REV: Tap (3.68) Sam (3.66) EV/EBITDA: Tap (18.5) Sam (19.6). The latter metric needs a closer look. Sam being the smaller high growth company is investing much more heavily in marketing and development. In the GAAP income statement these investments are a cost imbedded in SG&A. The trailing four quarters show that Sam spent $0.09 per sales dollar more on SG&A than Tap. So if Sam were to go into "financial discipline" mode, at the cost of growth,(which no level headed Sam investor would want) and level off SG&A to Tap's $0.27 on the dollar this would have lead to over $70mil dropping to the bottom line, or $5.48 per share. Add $5.48 to the $5.24 it earned over ttm. and you have $10.72 trailing EPS. This is about a 20 P/E ratio compared to Tap's 16...Wall St never upgrades a stock that it actually WANTS!
Soros is not an activist investor. He is the ultimate tops-down investor who focuses first on countries and central banks. He's more likely buying a basket small cap E&P's because he's bullish on the price of energy. When the price of energy moves up the companies with smaller capital bases fly. I'am almost certain that he doesn't know Gary Evans from a bell boy.
headline... "Royale improves Q1 performance by 38%"...when the headliner could have been...ROYALE INCREASES REVENUE BY 150%...The stock should have closed over $3 this week with major momentum heading into the seismic results...and they pay this guy $200k per year!
The $600mil notes that mature in May of 2020 are trading just over $110 yielding 350 basis points below coupon. Tapping a very strong bond market for say $200mil to take out one of the preferred class's and shore up the cash position ought to be considered.
I don't think it's out of the ordinary that market to adjusts for risk. Understand that the general market isn't as dialed in as to what's going on with the Farley or Stadler pads as you are. The easiest way for guys who manage funds is to focus on the financials. Here's a company that in Q1 had $38.9mil in EBITDAX, which is essentially a liquidation cash flow that the most senior lenders focus on. The $38.9 has a run rate of $155.6 which is less that 40% of the capex. How does this company fill a $245mil gap?... the fund manager wonders. And without any more DD he sells moves into T-bonds until he finds a replacement of which he has a universe to choose from...Simple as that, no conspiracy.
Can't say the operating numbers are good but we all know that it was winter related. And wish they would give a fuller picture of Eureka. The net portion shows Eureka's gross margins looking pretty slim.
The average estimate is flat revenue ($98.5mil) and -$0.16 EPS Vs. -$0.06 a year ago. There's a lot of parts in between revenue and EPS but I think that with flat revenue analyst have learned to model the huge depletion cost that shale operators face. Through the lens of a banker shale operators on scale consistently look like lousy business's. However, the market will reward an operator that grows production and reserves with internal cash flow, as GPOR comes to mind.
I think the buybacks are on hold until 15. Every dime of the free cash is going towards the $160-$200mil capital expend. The Capex is huge when you consider that at the beginning of the year booked PP&E was $260mil...this is the price of robust volume growth.
Early trade suggest that the market might be disappointed in the hold on guidance. However, depletion growth is very strong.
"The Alaska Senate is debating a large project that would involve a natural gas liquefaction plant on the North Slope coastline, a natural gas pipeline system and a natural gas processing plant. The State might have a stake in the project. Presently, lots of natural gas on the North Slope is being flared because it has no access to market." -Shale blog
This company can afford to spend such a large percentage of it's revenue on marketing. This in turn fuels top line growth. In ten years the company could easily exceed $2.5B in sales just in the U.S. The cash flows to this point have been strong enough to support brewing capacity and keep the share count relatively flat. That being said in ten years the price of the stock should be $700-$1000. It's possible that growth could accelerate and this happens a lot faster but ten years gives me a reasonable expectation. Who knows what the picture looks like after 10 years. The company may decide to pay dividends and maybe being still un-levered pay a big dividend. Where those who buy today in the $230's have their cost basis returned...or they may decide to go international. Simply there is no company like this available on the public market right now. BREW has the name "craft" but Pabst margins.
Lexpress, I know very little on this topic. But I can assume that each well is designed and engineered for a specific reservoir. Maybe their testing shorter lateral and will drill an extension later. Pay and cost per lateral ft have been favorite metrics of Wall Street analyst but it might be a little simplistic unless its being compared to the next closest E&P. Otherwise I don't think there is a good rule of thumb.
The wells are relatively short on the laterals. Generally most monster wells of late have been drilled 2 MILES laterally, which boggles my mind. These wells are less than half that. Production per lateral ft on these wells looks good.