Some chance a a share, after the markets close. They need to raise money soon. I don't think debt is likely because equity is poised to take a hit from impairments and they will be close to breaching covenants. Possibly a mandatory convertible that counts as equity.
One thing is certain, cash flow in this quarter is going to be a disaster.
Bottom line, somebody doesn't think much of puds. (finally) Likely the lenders are slowly waking up.
Brighter days ahead for the industry for sure. Not so much for Harold.
The present market makes a case for the integrated companies. It's a natural hedge. The analcysts don't like it much though. I guess they're little pointed heads ache from the complexity of it all. Their motto is "keep it simple, I'm stupid".
And what insight does your post communicate other than the fact that you're completely immersed in wishful thinking?
We'll alert the media. The market has been on the edge of it's seat wondering what sorbetfuel was going to do.
Hamm said the only covenant on bank loan is 65% debt/cap. No ebita/debt minimum. You KNOW he's drawing it down like there's no tomorrow.
4X trailing 12 months ebitax. That's the constraint. What kind of an idiot buys a 10 yr 4% bond with that kind of covenant from a shale oil producer leveraged 2X equity? Oh yeah, it's rated investment grade! It's insane. Subprime writ small.
I don't think they will breach in the 1st q either. Although they may. Their covenants are ludicrously light, but all it allows is for Hamm et al to furiously dig a deeper hole. And man is he. He said on the conference call that 2/3's of capex ($1.8 billion) will be spent in the 1st half. Right into the teeth of oil in the $40's. At least half of that money won't come back out. Cash flow looks like $750 mm for that period. Including working cap deficit they will be $7.5 billion in debt by June requiring about $4 billion in equity. More than $800 in impairments and they need to do something. At that point they will be close to breaching both 65% debt/capital and 4X ebitax. Both covenants that guarantee the debt holders a world of pain. my guess is technical default in 3rd quarter and that a default is unavoidable.
Look, my basic reason for being short is that CLR need north of $100 wti to break even full cycle. Bankruptcy is inevitable. People can lend them all the money they want and they will lose it along with current share and debt holders. I think the present debt is worth maybe 50 cents on the dollar. Equity is worth next to nothing. We'll see.
BTW WLL is trading @ 110% of book, CLR @ 300%. And WLL can't get a bid.
short squeeze is the equivalent of alien abductions for you guys isn't it? When something you don't understand happens it's SHORT SQUEEZE! What other possibility is there?
Don't get me wrong, I love you guys. You sent my kids to university.
While SWN is unlikely to go bk in the immediate future, it's grossly overpriced and will be limping along with declining, production, revenues and cash flow. The next 3 years will be tough if the forward strip reflects reality.
Market cap is not used in ANY fundamental analysis except to determine if, after analysis it's cheap, fairly priced or expensive.
It decidedly has not "one of the lowest debt to equity ratios in the industry".
Look up debt covenants. You obviously have no idea what they are, never mind what would trigger a technical default by CLR . Go back to sleep.