They just wiped out more market value in their stock than they did debt.
What they should do is authorize a small share repurchase plan. They just sold stock at 4--now buy some back below $3.
One must wonder what those institutional investors were thinking--did they not know that the mighty FDA would not review Ablatherm until next year?
WRES is not the only company on the lookout for cheap acquisistions, and I am sure there are far sharper buyers than WRES.
Buying DBLE makes the most sense to me, but there would no doubt be resistance from DBLE. Neither management has done much for their shareholders, though fat exec pay continues at both companies and their stocks are frankly in the toilet.
BBEP is a good candidate to buy both, Devon as well. NBL might even be interested because of its proven ability in the
Niobrara. NRP is also looking for acquisitions in o&g.
Where are the investment bankers when you need them? .
Yes, WRES has a decent amount of pipeline capacity, especially since they acquired Anadarko's pipeline interests.
DBLE is only using about 25% of its pipe that has a capacity of 125 Mmcf/d.
DBLE and WRES could just contract out their needs to move their gas with whoever would buy the pipeline. Devon is a candidate if the total pipeline capacity is not too small a deal for them.
DBLE moves its gas into Southern Star, who would also be a candidate to buy Warren's and DBLE's pipeline capacity. Williams is all over the place up there as well.
I'm with you. They can pay down debt, develop their own assets with excess cash flow this year. I still like the idea of a stock buyback--might be a cheaper way of acquiring reservs than drilling for them.
IMO, WRES and DBLE should combine their pipeline interests and sell them to Devon, who has a lot of production and acreage in the Green River Basin and is forming an MLP. Pipelines have been going for 7-10 EBITDA lately.
At $40/lb, uranium supply is hardly constrained.
June 14 could be a big day for uranium. #$%$ parliament is expected to vote on whether to allow some closed nuclear plants to re-start.
This board is a ship of fools, and you are the captain.
Production hit a new one day, all-time high last week.
A couple of reasons:
It might go lower.
Other investments might be better.
But BBEP looks like a great income investment at this level. Cash flow is not quite where the company wants it, but I think they intend to maintain the dividend. Tough to beat the yield. I just bought some.
Data below from Bentek, probably the best firm on natural gas supply and demand. Extermely bearish for prices starting later this month. July could be a disaster for gas prices IMO--if hurricanes don't disrupt production.
Market Recap Analytic Report (Weekly) - Production near all-time high
Bentek's modeled dry gas production just missed a record daily average level this week, with the May 24-30 period at 65.4 Bcf/d. The week included a new daily high of 65.6 Bcf on Tuesday.
Northeast Observer Expansions - Expansions Bi-Weekly Special Feature: Processing capacity expected to nearly double in June
Three new processing facilities and four expansion projects are expected to come online in June and add 1.33 Bcf/d of processing capacity in the Utica and Marcellus regions. This will almost double the current 1.46-Bcf/d capacity to 2.79 Bcf/d.
My understanding from reading the profile on GASX that its portfolio consists of about 31% of its assets being short FCG.
What about the rest of its portfolio? Don't they have to disclose all their holdings somewhere?
The package that APC had for sale included its wells in the Sierra Madre field, which were not part of the Atlantic Rim. If you want to learn about this field, just go the web site for the Wyoming Oil and Gas Conservation Commission and click on Field. Stinking Yahoo won't let us post links or I would.
I think there were only a handful of bidders on the Atlantic Rim acreage, but I don't know about the Sierra Madre wells. I doubt that anyone would want them, although the formations below the Niobrara do have gas potential. Note that DBLE says it has gas in the deeper Dakota/ Frontier formation, which is below the Niobrara. The company has to get a comingling permit before it can test those zones. There have been some large gas reserves found in the Frontier in that area, but I still doubt that anyone would APC's Sierra Madre wells because they are on their last legs, and P&A expenses are not far away--unless someone--WRES-wants to re-enter the wells and try for deepeer gas zones. I wouldn't waste the time and money on it myself, but this would certainly be worth asking about on the company's next conf call.
One possibility that comes to mind is that there may still be drillable locations left in the Sierra Madre-- I don't know what the original spacing was but DBLE is talking 80 acre spacing if its Niobrara play pans.
Maybe I have been a little too harsh of Warrren's CBM results. It was really Anadarko calling the shots on how those wells were completed, and they are the real culprit responsible for such dismal production results. I'm encouraged that WRES hired a veteran CBM guy, and from Warren's recent comments, I think they are gong to start using nitrogen fracs on the CBM wells. It's about time.
Now let's hope Warren has sense enough to get adequate water injecton capacity in place so they'll be able to produce gas once the wells are down. Anadarko botched this on some of its earlier drilling and couldn't produce gas until the next season.
Sure, they could have some old logs, but so what? Anadarko had those logs and still wanted out.
Your third point may make some sense except for the fact that those old Anadarko wells are pretty well depleted. Maybe more important is that those wells look to be about 20 miles from Warren's acreage, and the geology may not be the same as what WRES has under its acreage.
My understanding is that no one else even bid on those wells, probably because plug and abandon expenses could be more than the revenues generated by those wells. Remember, that field (Sierra Madre) was discovered in the early 1980's!
Just an offhand thought here. Breitburn Energy Partners is a good company looking for around $500 mill in acquisitions this year. For that amount, they could just buy WRES and DBLE, keeping the development acreage of both companies to themselves. They would have the wherewithal to farm out the Niobrara acreage to a big industry partner, and maybe on terms that DBLE and WRES would never get. At the rate DBLE and WRES are going, will we live long enough to see the play developed?
yup, what morons.
They should wait to raise new capital until AFTER Ablatherm gets approved...unless the don't have much confidence in it getting approved. The financing sends the wrong message to investors, a continuing pattern at EDOPE.
I'm with you. WRES and DBLE should pool their acreage, share data, and get a partner. This could create a terrific win-win situation for both companies and their stockholders.
As a shareholder in both companies, I'd like nothing better than to get a news release saying that just such an agreement has been reached and that someone like Noble or EOG will be paying x number of dollars to each company and carrying them for 20%+ after payout. 10 well program to start. Oh yeah!
It sounds like DBLE will be drilling one and maybe two more Niobrara wells that wil be re-entries on wells where they already have seismic. These wells will cost nothing like that first one--I'd guess the cost will be less than half of the first one. Bottom line is that DBLE is taking the risk, but if they are successful, they'll have a better chance than WRES in attracting a partner.
All Warren can say now to a potential partner is "look what DBLE found."
Yes, I am a small WRES shareholder. This is a cheap stock at around 3 times cash flow and well below NAV.
I work in the industry and am in the Rockies. I do know about CBM and the Niobrara.
It's not risk free of course, but I think there is enormous upside in the Niobrara, both with DBLE and WRES. Shell and some other biggies are drilling south of the Atlantic Rim and getting good results.
Both DBLE and WRES are very cheap stocks, and investors are paying nothing for the upside in the Niobrara. My view is that both companies should sit down together, smoke the peace pipe, pool their data and acreage, and GO GET A BIG TIME PARTNER. The way it is right now, they are acting like like a couple of little kids.
Maybe that's why both stocks are being punished...
WRES knows very little about their Niobrara potential. They didn't even know about Entek's drilling until one of their shareholders told them. Did Warren even know that Enek had already commissioned a top notch geologist to do an analysis and report on the Niobrara? Did you know that Entek has made a nice deal on its acreage with a big time company--how about the terms they got, do you know them?
Did you or any other of the Warren shareholders know any of this? If not, I submit you are still totally in the dark.
They are spending $15 mill on CBM wells that may not be very good producers the way WRES completes them. They'd be better off spending the money on their own Niobrara well, but thanks to poor planning by WRES, they won't have any Niobrara potential if they lose that acreage. $15 mill is their price of admission to get into the play.
DBLE has drilled enough CBM wells, and much better producers than Warren's, to hold its acreage for a couple of years without doing any more CBM drilling.
The data from those Anadarko wells is worthless. Plus WRES is going to have to pay to plug and abandon those wells. They are stripper wells, you know? Warren has essentially nothing in the way of worthwhile well data for the Niobrara in their area.
If Warren doesn't do a MUCH better job of completing their CBM wells, then their $15 mill will be largely wasted. They have wells up there producing 30-50 Mcf/d at a cost of around $800 k per well.
If they used DBLE's completion methods, Warren's wells would be producing 200-400 Mmcf/d, maybe more because Warren coal's are thicker and have a higher gas content than DBLE's.
Oh, and somenoe please tell WRES that they will need water injection capacity to get rid of the water so they can produce gas. In years past, they have drilled CBM wells only to realize afterwards that they had no place for the water...and couldn't produce gas until they did. Duh....
You have to get permits to drill water injection wells--wake up WRES.
Stinking Yahoo wont le me post a link to the full article, but you can find it on Investor Village in today's postings for BRY.
Sounds like Russia is about to gain control of uranium prices!
Putin's Power Play - How It Will Change the Uranium Sector
By Casey Energy Team, Casey’s Energy Report
May 17th, 2013
The last time Vladimir Putin was president, he laid the foundation to pull Mother Russia from the wreck of economic chaos to a world power once again. This time, he's ready to extend that influence to counter the West. His tools: Russia's abundant resources of energy, including uranium.
There's a new war developing on the continent, and the weapons this time will be oil wells, gas fields, and uranium mines, pipelines and ports, processing facilities, and supply deals.
Led by Russia's vast resource wealth and China's massive bank account, the countries of Asia and those along the Eurasian divide are realizing they do not want or need help from the West to achieve their goals. They are settling their differences, negotiating closer relations, and advancing their plans without as much as a phone call to Washington or Brussels.
After years of Western dominance in world affairs, they've had enough. And with Vladimir Putin back in as Russia's president, this emerging bloc has its leader.
Vladimir Vladimirovich is a man of remarkable intelligence, determination, and ruthlessness. In many Russian eyes, that last attribute is far from a fault – they see him as a man's man who restored their country's pride, economy, and position of influence after a humiliating period they'd rather forget. If that has required trampling some citizen rights along with much of the country's new capitalist class… well, nothing comes for free.
From the chaos of financial collapse and political turmoil in 1998, Putin increased GDP by an average 7% annually, cut in half the number of Russians living below the poverty line, grew industry by 75%, and doubled real incomes.
Noise can move stocks, but yes, I agree, it's going to take higher uranium prices to get a big move up in these stocks.
With many of them recently hitting multi-year lows, the risk/reward looks favorable for buyers IMO. After all, how many industry groups have been hitting new lows in this market except for gold and uranium?