Needless to say reading your post really got me worried about you. I am also down a bundle on this stock as are many other. But you have to remember that first of all our losses are still only on the paper and I do believe that management is not going to leave shareholders high and dry....But most importantly, and no matter what happens to this stock, you need to remember that no amount of money is worth your life or your health and as long as you have your health you can still enjoy a nice sunny day, a good music, a good friendship, a nice walk on the beach, a romantic love, etc etc.
Otherwise the best things in life are FREE (that also includes your health).
I suppose we all get pretty depressed when most of our hard earned money we sunk into PGN is been banished in front of our eyes...Specially this day after day looking at red tape while each day losing thousands can wear anyone out. There is also been an element of devastating and traumatic surprise as not only the shares had gone from $17 to $0.90 of about 3 weeks ago but just in this last 3 weeks and through actions of the management shares dropped another 70% or so...And so it is okay and normal to be down and frustrated but IT IS NOT NORMAL TO WANT TO DIE OVER MONEY.
If you are really suicidal I beg you to get some professional help. Think you your loved ones and all that life has to offer ...
If need be we can also create an email where folks here can talk to each other (something like PTSD group therapy). If you think that would help you or anything else others can do to be helpful let the board know.
The market is so ideal for purchasing debt that your 40% is considered too much. EXXI just purchased $428 million for only $94.4 million which translates into 22 cents on the dollar (or at 78% discount). If EXXI can do so can PGN except PGN's management is simply too jumpy and erratic the same way that they jumped and began paying $1 dividend right post spin off or bought the prospector for such a hefty price after being in existence for a few months they now jumped and hired these two expensive firms while they could have laid low and slowly bought dept in open market and bought shares but they claimed not much bonds comes into market and they could not buy whereas they did not even try to buy a single bond or share of stock. YES they did not even try; to them the issue was get off their fat behind and spend time on daily basis buying bonds or be on the phone negotiating with bond holders when they could simple hire couple of expensive firms to eat away more at company's hard earned capital and possibly in the process burn the shareholders.
This is what happens when CEO's are not held responsible to shareholders which I heard one of the presidential candidates is promising to change ( Which is something I 'll believe only if it happens). Of course this CEO and management don't even care about shareholders! and this is not an exaggeration: I challenge anyone to show me one action or step taken by this management in support of or to help shareholders. Just show me ONE. That is right you can't because they have never done anything to even remotely support shareholders and THAT IS EXACTLY WHY THE SHARES TODAY ARE AT ALL TIME LOW.
That is why my post. I have spoken with the management and believe they do care about shareholders...As a matter of fact I was told straight out that they care and to prove that I was told "we are shareholders ourselves". Having said that I agree with you that management has not so far shown much care for shareholders but we have not seen their next, and most important move, yet.
I don't believe so although anything is possible in this market but specially in the oil sector as near most companies in the sector are in the same situation as PGN with nearly all trying to achieve an out of court restructuring...As an example see my previous post about EXXI...You can also go to SA and read the whole article and you'll notice that EXXI has nearly 2.5 times as much debt as PGN ($5.4 billion) and less cash ($700 million vs PGN's $800 million) with their assets less than debt ($4.7 billion in assets vs $5.4 billion in debt) and yet they are working hard and succeeding in out of court dept purchase at big discounts (bought $428 million in bonds for only $94 million) and yet they are not thinking ch11. What is more they expect another $900 million asset write down in Q1 which will bring their asset value down to $3.8 billin vs $5.4 billion in debt.
Where are those smart guys that were calling for PGN filling ch11 just because their assets may be worth less than their debt?
"EXXI's management has been extremely active during 2015, doing everything possible to increase liquidity and lower the company's cash costs, in an effort to prevent bankruptcy.
Between June 30th and September 22nd, the company managed to repurchase $428mil of their bonds for only $94.4mil, which will result in an annual interest savings of $32mil. The positive impact of this move cannot be overstated, as the company is netting a cash-on-cash return of about 35%. EXXI management went about their repurchases very intelligently, as they purchased the longer dated bonded, which were trading at greater discounts to par than the shorter dates. This also increases the incentive and pressure on the 2017 and 2018 note holders to renegotiate their positions with the EXXI.
EXXI management has also successfully managed to lower their per barrel cash costs, as they had projected in their presentations in May and June. LOE costs were down 30% in Q4 compared to the previous year, while G&A were down an even larger 36%. Management did note that they think they can achieve an additional 10-15% over the course of the next year.
CapEx has also been dramatically lowered, to only $130-150mil over the course of the next fiscal year. The company's goal with this year's program is to try to maintain production as much as possible, particularly oil based production. They do expect to see a 5-10% decrease over the course of the next 12 months."
"Article"? It is not an "article" but rather a posted personal opinion of this guy named Anthony Ruben who does not seem to know much about anything and yet is posted two "articles" in the past couple of week, with today's a regurgitation of his previous one filled with desperate attempts to claim he knows not just more than he does but also to claim he can tell the future despite so much uncertainty including oil prices and whether and how much debt can Paragon buy back on the cheap. And when someone asked about this he got upset and began throwing insults. The question is where and why this guy is suddenly showed up and why does SA give a forum to any ignorant fraud with ulterior motives.
What is more, and despite his claim that he himself does not own any shares (he is probably thinking who is going to check? right?) he obviously has ulterior motive (friends rubbing each others back?) as he must have had today's "article" up his sleeve but rushed it out because PGN advanced 10% today.
Of course most know that these so called SA "articles" are individuals personal opinion (any of you readers can go to SA site and register and begin posting "articles" within less than 5-10 minutes).
What is disturbing though is that SA posters did not used to be low-lives like this Ruben guy that post bunch of lies and fabrication and employ scare tactics but cover it up by beginning their "article" with worthless and made up tables to make their fraud look legit.
Again, I remind folks that nobody knows at this time what the future will hold exactly as it depends on not just oil prices and the world economy but also on how successful the company and their two newly hired firms are in restructuring the debts and buying back bonds as well as new contracts in future and success in further cost cutting, etc. However what we know for sure is that the company is working diligently to get things done out of court as it is to is to nobody's advantage to go the court route
Well said Alan...I don't believe some realize it is next to impossible to buy $350 million distressed bonds on the cheap directly from the market...For one thing it will take months or longer to buy that much but also as the market senses that there is a buyer out there the price will jump. As you mentioned, it is obvious that those firms are busy negotiating with bond holders to see if some will be willing to sell out of court and letting them know that the alternative is not to their advantage. I also believe they are talking to the bank holding the note on the revolver to relax their covenant...These two firm are pretty good at this and are a couple of the best in the country (and expensive) and as such I expect decent results. Folks here need to be patient as this will take time and there is no use for the management to put out any press releases at this time about what they are doing as that may only tie their hands in this ever changing and fluid oil market.
As a matter of fact I know from speaking to IR that they are going to pursue the breach by Petrobras vigorously .....Also I know fora a fact that these two newly hired firms are only for capital restructuring and have nothing to do with Petrobras case.
In sum: Petrobras case is not over by a long shot and management is very hopeful that at the end Paragon will prevail.
Another reason they won't do a ch11 is because They can't as no judge will grant this to a company that is cash flow positive at least for another year and has nearly 800 million in cash with no debt due until 2019. But still the shareholder lawsuit prospect loam bigger than anything as not only at least two law firms are already looking at this but also some large shareholders have already signed on and for reasons I have this hunch that management already knows about this.
I believe they are currently looking at ALL possibilities but ch11 is not on top of their list for a number of reasons including the last thing they need is a shareholder lawsuit or yet another black eye for Stilly as well as the credit worthiness will be ruined for any future borrowing, etc. But also because the oil market is in such a wreck right now that bond holders will likely consider any and all offers out of court and ch11 is the very last resort. I also believe for the same reason the lender of the revolver has much incentive to cancel or change the terms of the covenant... If the management take their time and uses the full expertise of the hired firms this may actually turn out to be a blessing in disguise: Imagine a situation where their debt is cut by a substantial amount and down the road the oil prices rebound! This is scenario that is very much possible as the war in Yemen is draining those fat cats in Riyadh to the tune of nearly $150 per year and once their reserve drop much lower they'll make a deal with Russia and others to cut back in oil production.
I don't mean to be rude but are you listening to yourself: "when all your credit cards get maxxed out"...Really? Do you know what it means when someone maxes out their credit cards? That nearly always means the've spent all their cash as well as spent every penny available on their credit cards...The key word here is 'SPENT'...Is you rush to make folks people believe that ch11 is coming is overwhelmed you to the point of blindness and fabrication and misrepresenting facts? Had Paragon spent all its cash or spent all the cash they took out from the revolver? Have they even spent a penny of the $330 million they took out? All they did move the money to their account from the creditor's in case potential worsening oil prices or if they don't get a waiver on the covenant (which applies only to the revolver) they won't have to watch while the credit is withdrawn.
As a matter of fact nearly everyone agrees that maxing out their revolver and adding the amount to a their nearly $460 million for a total of $800 million is the smartest thing the management is done in a long time.
And don't tell me that well they have so much debt etc. as most companies in the wall street have debts as part of their development and expansion besides , even with the debt , for you negative talkers here to always mention the whole amount of debt and not mentioning a potential significant amount in reduction of the amount in case of out of court negotiation with creditors or the effect of a potential rise in the price of oil in the future or potential reduction as company continues to be cfc positive (payment) or the fact that the debt should at least be discounted by some of the $800 million cash sitting in their books is beyond me. How ignorant do you think people are ...Or are you the ignorant one who does not understand simple math?
Wrong. But let me ask you about just one thing: what is the biggest factor determining the future of many highly leveraged companies in the oil industry today? OIL PRICES? Of course it is oil prices. None of Paragon's current debt is due until 2019 ! If you could tell me with slightest certainty what will be the oil prices by 2019 then I will tell you where Paragon will be by then. Otherwise it is unwise and not realistic and frankly dumb to presume everything on current oil prices.
Also, the Moody's downgrade in no way means bankruptcy as you try to claim as many companies get downgraded by Moody and other credit rating companies everyday. Besides they have downgraded almost every company in the whole oil sector of the late. Also, companies like Moody and S&P are for most parts follower and not leaders in predicting trends as their grand failure in 2008 mortgage failure clearly indicates. Where was Moody's downgrade when PGN was at $17 a share. Now they show up when the shares are a pathetic 25 cents and do a downgrade!!! Any elementary school kid with couple of classes in math would do the same if you just showed him/her the dramatic stock price decline. Even if Moody and alike knew the shares were going to go from $17 to 25 cents months ago you think they would have told us through a public downgrade. Of course not they would alert their fat cat clients and their own employees and budies to short the stock (where do you think those millions of shares of PGN shorted came from? Retail investor? Of course not). The only reason they are downgrading now is for two reasons: to cover their track and to squeeze a few more pennies for their short bodies and clients while acting as though they know what they doing.
I know as a matter of fact that management reads these message boards and that they know that attorneys are looking at both PGN and Noble on behalf of the shareholders.
Mr advice to shareholders is that it is too late to sell and probably best to hold on to your shares...Although anything is possible with this incompetent management I truly believe that at the end of the day they will re-organize outside of the court and the share price will easily go back to where they were a few months ago. Of course, again, nobody know exactly but that seems by far the most logical outcome in terms of what the lenders and creditors would want and what the shareholders would want but also very importantly what both Paragon and Noble would want to avoid namely a protracted and costly lawsuit.
I don't believe the company is going to take any drastic steps such as buying shares or bonds, etc until all options are looked at with the help of those two firms and until a clear path forward is charted. Emphasis here is ALL OPTIONS and that includes outside of court reorganization as well and ch11 and asset sale and lowering the costs and head counts, etc. But the point is at the end of the day and when it comes to capital restructuring it is obvious to me that they will go the outside of court route as it is not to the benefit of any of their lenders to file ch11. To understand this better read SA article published this morning about why EXXI will not file ch11.
Following is an excerpt from an SA article about EXXI published this morning...Go READ the article and you be amazed at similarity of the situations between EXXI and PGN (if anything PGN had less debt and more cash and PGN's debt is not due until 2019 whereas EXXI's is 2017 and yet EXXI's cap is 5 times that of PGN even-though they have also consulted firms for capital restructuring) :
"The secured lenders are in no rush to force the company into bankruptcy. As long as they are being paid and their security is good, they really do not have a risk of loss. The unsecured lenders realize that after the secured lenders receive their assets or money from asset sales, there is usually not that much left for them. Therefore, the unsecured lenders are far more likely to allow the company to continue to operate, in the hope of being made whole somehow. Assets, particularly cash, have a way of disappearing in the bankruptcy process, plus no lenders get paid for at least a while during bankruptcy, and future possible payments vary incredibly. Lenders don't like the uncertainty. Prices for distressed or bankrupt assets are usually incredibly low. Usually the secured lenders are the highest bidders for the amount of their security. Recovery rates are just not that good for any bankruptcy. So usually lenders will encourage companies to reorganize their finances outside of bankruptcy. "
I agree and continue to believe, as PGN management have been telling folks, that no ch11 is in play and that the venue be considered is an outside of the court reorganization.
Cash is king. Almost every company has debt but not many have cash. You are also wrong regarding Petrobras contract as even Moody and S&P in their report agree that even presuming all their Petrobras contracts are cancelled that they will stay cash flow positive at least until second half of 2016.
I also can't phantom any judge would look at all the cash and their cash flow and will agree to a ch11. It just won't happen. I don't think they will even try. HERO's situation was completely different as they've been losing money for several years and even before the oil price drop and even with that case there was $10 million allocated to shareholders.
From Moody's article:
" The Caa2 rating is supported by Paragon's significant and diversified rig fleet, $1.6 billion contracted revenue backlog providing a degree of revenue visibility, and our expectation of modest free cash flow generation at least through mid-2016."
"accumulating a large cash balance of about $736 million at June 30, 2015 (proforma for the $292 million sale-leaseback in July and $332 million revolver drawings in September)"
Above statements indicates that not only company would remain cash flow positive "at lease" through mid-2016 but its $1.6 billion backlog and $736 million in cash will make it able to pay its bills for a few years after that.
But most importantly, and hidden between the words, is that the article itself can be used as a tool to convince the debt holders to agree to an out of court agreement for a substantial reduction of their debt as well as even getting a waiver from bank that owns the revolver.
All and all this article, despite being about downgrading ratings, it actually says some of what longs have been saying in a nutshell including the assertion that in any reorganization the shareholders would have to be included and the amount assigned to them would be much more than the measly $22 million current market cap and my expectation is that stock price will actually go up today...
As for protecting the shareholders rights folks here (and Paragon's management) should also know that more than one law firms have already been consulted for the possible lawsuit and that these firms are already evaluating and studying the situation and that in any settlement the expectation would be an amount much higher than current market cap.
Disclosure: I have been adding at current prices.
Yes he did and I continue to believe him and still have no reason to think he was taking me for a ride despite stocks performance.