Interest servicing cost has sky rocketed, free cashflow is now almost 0, back then the price reflected a forecast of 20000-27000 boe/d, current price reflects failed acquisition, failed drilling program, failed proof of concept in heath oil shale, in Alabama, iin the north sea heavy oil block.... lower through put volumes to scott platform, lower production and well performance at Alba.....The reason for the fall is a number of failures over a 2 year period.....The main 2 problems currently are 1) NO cashflow after interest servicing and maint cap. and well deplete so cashflow from current assets will decline 2) no cash to grow production, Rubee, r block great concept but they need at least 200 million to begin production if and if oil is proven to be there.
SO how do they get back up? Not sure...where is the cash going to come from for growth, not sure...what is the stock worth....could be 0 if reorganization in BK or $2 in a buyout....
NO position sold last year and have been watching, waiting...
One sign of concern is the Capitalizing of interest payments. When you capitalize interest, you skip the interest payments. However, you still owe the money and you'll have to pay eventually. Your lender adds the interest charges to your loan balance, so you owe more and more as you capitalize. Capitalization is the process of adding interest charges to your existing loan balance....A company that is making lots of cashflow wouldn't do this and eventually the leader say no. then forced sales of assets.
I watch for a reason to see if I can buy in and make some money, I still haven't seen any improvement. People point to their growth rate but ignore the debt that came with it and that more then half the free cash flow services just interest payments...I would love for them to turn around but I am still waiting. Yes they have in the latest with more debt more forward sales of production which is debt but doesn't show up under liabilities, more capitalizing of interest, lower volumes at Scott when we believed we'd have 100mm a day. Issuing more converts...At these levels it's an option, either $2-$4 up or 0. They need to sale North american assets lower debt and cash bleed and develop North sea asap, oil focus.
the growth came form debt, not internal generation. They can't take on anymore debt, cost of capital is too high and with depletion at Bachus and declining production profile, they have to make some hard choices, scale down the company. btw the cost saving on interst helps but it's still 30 million + a q in servicing cost
Consider in your numbers: The events below are why there is worry over debt servicing toward the end of 2014- into 2015 and a low stock price
"Mechanical failure in Scott resulted in an emergency shutdown of the platform, and following full investigation of the incident and completion of the remedial action by the Scott operator, production from Rochelle resumed on April 26. Looking forward, in the short term, we expect Rochelle production will be provided from the East Rochelle E-2 well. Good reservoir management practice to maximize reserve really dictates that the 2 Rochelle wells should be produced in proportion to their ultimate recovery. And thus, the East Rochelle well requires to catch up with the 2 months of production from the W-1 well last year. It should be noted that while W-1's completely shut-in...Looking further ahead in 2014, the third quarter is typically the period for maintenance shutdowns in the North Sea.There is a 16-day shutdown at the Forties....we entered into a third forward sale on approximately 200,000 barrels for the second half of '14, (meaning we don't get the rev or cashflow from).....pipeline System that is planned in August, and that will impact production from both Rochelle and Bacchus. Alba, will be shut in july for a period for maintience and safety testing....We continue to be disappointed with the high costs at Alba, caused by dealing with the several issues there, and we are working with the operator to address ways to improve.
It's all in the q1 transcript....you have to really do some Due diligence and not go cheers leading and misleading novice investors into a fray...There is possible reward here but it comes at an extremely high risk as well....we know we have 2 large payments due on our Monetary Production facility, one coming in January of 2015 and April -- and the second in April of 2015, totaling $104 million...
But was during a total market collapse, the indexs are making new all time highs but END is hitting all-time lows, company specific....anyway fishy story so you told this contractor to put 1.6 million into 1 stock!!! Why was he working if he had 10's of millions because an advisor would never put everything in 1 stock right.....misleading pumper, again those who wish to invest don't run blindly into any stock do some logical D&D. IF you own it now hold but don't throw money at something just because your ego is bruised
how many barrels of oil in the that 12 million insurance settlement?
You can't possibly be so misguided to base your thesis and survival of a company on this... TIme me where the growth and stability of production and the capital to execute on that will come from? The company must sell assets to survive or it's insolvent in 6 months. Fact. Look at the debt interest schedule and coming show downs in assets. Fact
Here is the thing, TMS is the last great oil producing Shale in USA...The ext wave going forward as was with conventional is massive industry consolidation, the major buying out the mids and juniors raising multiples across the board. The exploration side of the USA is about all done. Shale oil production nationally will peak in the next few years, Holding acreage is king. Our TMS alone holds 500-1000 million barrels EURs. back out cost to develop and that's at $100 a barrels 50-75 billion in profits, then Bakken, Eagle Ford, net of 150 billion over lifetime, we could get to a 30 billion enterprise value in 10 years, ($80 share). Especially with global peak production and higher oil prices. Opec is barely holding production at a plateau, global consumption has now outpaced production by 600000 barrels a day. Add in middle east wars... What type of profits do you see
not all boe's are the same the oil gets 108 but the NG barrels get around $54 a barrels (6mcfe=1boe, 1 mcfe in uk is about $9) with 60 of production NG that makes a huge difference. ANd then there is depletion and terminal declines at Bacchus
don't invest until you can understand the 3 financial stmts, balance sheet, cashflow, income, take a online coarse or look into a home study crash coarse otherwise you are gambling and guessing with your money
NO one will partner with a company who is approaching insolvency. Period.
Global oil demand in 2014 will be higher than previously forecast, after consumption in the U.S. rebounded to its strongest level in five years, the International Energy Agency said.
The IEA estimated today in its monthly oil market report that demand will increase by 1.2 million barrels a day, or 1.3 percent, to 92.4 million a day
Sentiment: Strong Buy
Peak oil did happen concerning conventional production, then deep water came which peaked, soon shale will as well, and peak doesn't mean it's all gone, It's about production, Conventional oil returns were in simple terms was 1 barrel of oil expended gave you 100-10000 barrels and declines were shallow where as shale returns are about 1 barrels uses returns only 10 and production declines are very steep. You have to run harder and harder to stay in one place or you start going backwards. And the margin cost per barrel increases with each new barrel Conventional was 10$ a barrel, shale in 45-80$ deep water 60-90 same with oil sands.
In the end the MLP's I believe are one of the best buyers 9% return a year and long life conventional reserves that benefit from the margin cost globally increasing the price per barrel sold. Dry gas in the opposite, lots of cheap sources to fulfill demand when it grows. Peak Gas in decades away
Sentiment: Strong Buy
there is no growth, that's a problem, sure they have acreage but drilling and exploration in capital intensive and they are tapped out and current assets are in decline, so is cashflow.... do some D&D before diving in
I'm not short, wish I was that, just disappointed my management and a realist. The seeking alpha article is very flawed. Do your own research friend. Everything I stated is a fact. Go to search UK north sea oil production and read the data, make your own model of terminal declines then. I encourage you, but if you don't know what that means, get educated on the oil and gas industry.
Yes there is upside, I just want the under educated oil investor to have the hard facts and the risks. Could double, triple or go to zero in the next 16 months, fact.
That's careless to count cash but hot debt....I understand you really really want it to recover but logic says they will restructure, period. debt coming due, no new production to offset declines in current wells, exploration needs 100;s of millions...best case is a reversal split with a massive dilution
Sentiment: Strong Sell