with some EFS acreage being marketed official as of today liquidity concerns should ease. As well it wanted surprise me see a hostile take-over considering the deep discount and that this appears to be the bottom or near bottom of the cycle. One could begin accumulating the debt at a discount, then make a play for the common.
Sentiment: Strong Buy
I appreciate your concern but you are wrong the oil hedges in 2016 are all swaps not collars so the math holds true. 6000bod at 80.41 swaps, see presentation and 10k
2016 production guidance 10% above year end 2015 based on a 200-250million cap ex program
12000 barrel oil a day (365 x6000 barrel oil hedged at $80.41 for 2016 = 176 million) + ( 365 x 6000x 12 month strip 2016 of $55 = 120 million)
4000 barrels ngl day (365 x 4000x 14$ per barrel= 20.4 million)
5000 boe of NG day 6:1 ratio, 2.90 gas (365 x 500x $17.4 per boe= 31.4 million)
total rev 2016 = 176+ 120+20.4+31.4= 347.8 million
cap ex $225
debt servicing 92
pr div 24
cost per barrel taxes, loe, g & a, gpt = 14$ per barrel or 107 million
Total expenditures = 225+92+24+107 = $(448 million)
Cash short fall approx 100$ million, but the next 2h 2015 PVA will spend within cash flow because cap ex was front loaded in 1h 2015, so one can assume liquidity at year end will be about 200-225 million
Liquidity “July 30th 2015” Pro forma liquidity, assuming the closing of the previously announced sale of our East Texas assets would have been $260 million, assuming a $30 million decrease to our borrowing base related to the assets to be divested.
Liquidity year end 2016 100-125 million
Production year end 2016 12000bod, 5000 boe dry gas, 4000 NGL bpd =21K boe
Price deck oil $55, NG $2.90 mcfe, NGL $14
Not great but more then enough to get to 2017.
If oil raise into $65-70 range in 2017 then PVA will survive, if they sell water gathering system, JV EFS, sell granite wash, sell 10% of EFS land then the bar is lower.
Sentiment: Strong Buy
all their senior notes are unsecured and trading at a deep discount now, 55-60cent on the dollar. I'd like to see them issue some senior secured and buy back the unsecured at a discount, lowering overall debt and interest servicing cost.
in a line bullet point: every business line is losing money, services and upstream, or more correctly the limited cashflow can't cover the current liabilities and they will have to do something....but very few options none of which will be good for the unit holders
Leggie,, Trader, you have to be realistic. 1) their upstream business is currently unprofitable and will remain so into the next 2 years based on the strip for lng....oops .... ngl's (see you should have focus on my analysis vs. a typo, hurts huh) which is the bulk of their production profile, they are exiting the services business which you all thought was the gem, a cash cow, which has been proven to be uncompetitive and inferior to the the major service companies. What's left? debt that can't be serviced and PR that will ensure there is no distribution for years and most likely a dissolving of the partnership. 0 value
I told you so Leggie and trader, lair all the facts out. You should of listened, now they plan to exit the services side, why? They can't complete.
it more likely now everyone expected a much higher price for the assets sold
awfully quiet now son. please at least look at the fundamentals, whats left, what they owe, the cost of tms, it's 5000 feet deeper then the EFS, more expensive to develop. Meaning unless you have a few 100 million to invest in drilling you are done
you are too under educated about gdp's balance sheet, terms of debt, production profile, current liabilities, etc to have a debate with. I assume you are some kid who decide to give a hand day trading, sorry you choose this one, down on news debt trading at pennies on the dollar.....fyi the production and reserves backed their secured and revolver so very little will hit the balance sheet. plus the revolver will be redetermined lower. leaving them as before the sell little room and just enough liquidity for 4-6 months
Dude what's the enterprise value, what's the debt, the current production, the reserves after sale....Oh i'm sure you made a truck load especially when it#$%$ a new multi decade low on the news. Very funny.
I suggest you look at what's left of the company, they sold cashflow, almost 40% of the companies oil production. It's obvious that the PR dividend will cease. Debt servicing is still north of 80 million per year so what will rev be now, sub 100 million in 2016? I wouldn't say they are out of the woods friend
Sentiment: Strong Sell
The banks only survived by gov,t back stop, the price then was correct. The energy industry won't get a bail out. Generally the bond market forecasts trouble first
As well Zan when looking into investing in a company there is a saying, The bond Market Never Lies.... meaning look at where the debt is trading to see what the real sentiment is. Stock prices can be wild in to under $5 range, especially under a $1. But bond prices tend to reflect the real risk
"Allow" If it happens it won't be by choice. If you can't meet your obligations They can't control the oil price anymore then you or I. Management in Bk always (99%) act out of self interest. They get deals where they stay on and receive equity in the new formed company to manage the transition.
MLP's tend to have more conservative leverage and assets that are mature which means a low decline rate and require low maint. cap to maintain production. Less cap intensive. They will survive longer in a downturn for that reason. Good management is important, but the asset base is first on the list. IMHO
feels like close to a bottom. depends on the CC for q2 and see how much margins have compressed. I warned you all.
yes I do, it increase the margins company wide because the asset sold was basically NG production and NGL. It'll lower G&A and other fixed cost by eliminating the need for a east Texas office. Considering no hedges on Ng in 2016 it's a smart move to increase liquidity, lower corp expense and increase company wide margin per barrel. That's the short answer.