Oil at 47$ BBEP at 5.39$ My call is they will touch that before rising to $75 in 2015 oil and BBEP cutting distribution to .10 a month and ending 2015 at 11$
They are covering their backs from law suits if they cut distribution. Stating clearly the language "at least" is based on these assumptions, so if 1 or all do not happen they are not liable.
But in bk they will restructure, cancel common like LPR or Gmxr to name a few...companies are rarely broken apart and sold in peices, the bond and banks push for restructure where they get the equity, the executive keep their jobs and the stock is cancelled
Good for you. Wow 3 k that's a lot of money...lol... to ignore the facts is silly much like trying to create some personal relationship to an insider, as if that give you credibility, were your previous girlfriends from END, GMXR, ATP, Enron... You are right its risk reward...but cheap can get a lot cheaper, and until oil bottoms you are just guessing and hoping... what a punk.
There are say merits to what you say, my comments were more to point out the ignorance of Smither1970. plus there is the b factor in the TMS to cope with...which means more capital to keep production flat...I think a sale will take time the major and VC that have capital will be selective knowing that a lot of land is coming up for sale as the leveraged E&P's look to remain solvent. Perhaps a sale of all NG properties would be better.
You could say more, that's only half it's oil production is hedged, the other half is unprofitable at sub $60 a barrel and therefore if oil stays low, any new production it cashlfow negative. Debt still needs to be serviced and each new well cost 11million to drill....selling the Eagleford will help but who will buy? Especially when the Eagleford is getting close to uneconomic at this oil price....what price do you think a buyer will pay at the bottom of the cycle.....not a lot.. Plus selling Eaglefoord means lossing 2200 barrels a day of production and cashflow.... Need you say more? Where to begin....
I wouldn't worry they are incredibly well hedged and have a lot of liquidity. By q2 2015 NA oil production will flatten and begin decline as will some other national oil companies abroad. This company will thrive and I coould see them going on an asset buying spree in 2015. The presentation says it all, hedges stable low decline, not alot of capital to keep production flat.
Sentiment: Strong Buy
And there is the debt covenants which we will be in violation of by the end of q2 15
the hedges cover only 55% of oil production, it's not enough to ensure solvency, that's the reality and why the debt is trading at .57cents. It's hard to say what will happen. The credit line has a re determination is a few months which if cut could seriously harm the companies ability to generate cashflow....the oil price ang ng price will dictate all....its a waiting game I think we will stay flat or marginally down with tas loss selling until oil climbs back to 70$
With 80% of reserves developed it doesn't take much to keep production flat, they can suspend all growth projects, lower cap ex spending drastically until oil recovers, hedges will cover us for 2 years and no major debt due until 2020, bonds are trading at .91-.92 cents on the dollar, no alarm there, of coarse should oil stay below $80 for beyond 2017 then we might have a no problem but we can choose to focus on Natural Gas which we have a lot of reserve of to develop at a low cost..... it's going to be a rocky ride but you make money when you buy and at 10$ a share and the hedges and lots of liquidity I see the risk reward favors the upside 12 months out.
with over 2 billion in liquidity, they are extremely well positioned to pick up assets that are extremely cheap that can be accretive at these NG prices and oil, hedge them out and when the market price stabilizes for oil price freecash flow will grow rapidly. They can acquire to maintain distribution level. Many shale companies will have to sell off legacy mature properties to maintain leasehold in their growth plays.
liquidity and solvency are paragon here.
Sentiment: Strong Buy
you are both right. It would depend on if they locked in the drilling contractor at a fixed cost and other associated materials...but for an MLp the hedges do their job to provide visible cashflow to fund ops and distributions. Should price pop in oil and NG they drill more
Regrettably I am completely out of GDP now and booked approx 900$ in profits for the year I was trading it, prior to the collapse it was much greater as all of ours was.....Now I am waiting on the side lines....The trouble
I foresee is the debt covenants issue of 1:1 current assets to liabilities and 4x trailing 12 month ebitda to total debt.... I can't see how they will generate 130 million in ebitda each q in this environment, and even with the 60 million form assets sales the current ratio is about .6-.7 times....Asset sales would be the fix but whose buying here and at what price....any thoughts from the gang? Logical please...Any one know what kind of cap ex is needed to keep production flat?....What a drag to see the TMS brought down by Opec....For those who answer let also consider at which point can their operations be self funding and what amount of capital to get there and price deck.
My call here is hold if you are in and wait if you are not until we can answer these questions
You have to look at where they operate, the scoop in very expensive to drill, below 60/bbl its unprofitable
the reserves are restated annually based on average 12 month price, reserve are using in debt cove. and nav all companies in sector are going to suffer....this is the black swan i certainly didn't expect... Will hold the MLP's, high % amount of hedging, years out and conventional low cost production...I figure 2-3 years prices will be back in the 90-100$... have some serious remodeling to do.....good luck all
granted this drop in oil is ugly but thankfully hedging in the mlps space ensures survival where as some e&p's will disappear.
I'm surprised the USA government hasn't come out against this manufactured low oil price, think of all the jobs that will be lost and tax revenues?
It's an issue of national security Opec, Saudi is trying to force us back into a dependency which mean the more military and foreign aid will as Americans spent and send over there because we are dependent on their oil.vs. our own.
I'd rather pay 10$ more a week for gas in my truck and employ a petroleum engineer, a drill pipe-setter, a truck driver, a guy at the refiner, a gal at a gas station, the waitress and the local diner, a cashier at the mall.
The loss in flow-through economically is a huge job killer.
n November 18, 2014, Patrick E. Malloy, III, the Chairman of the Board of Goodrich Petroleum Corporation (the "Company") purchased $1,500,000 principal amount of the Company's 8.875% senior notes due 2019 for an aggregate purchase price of $1,122,502.75, including accrued but unpaid interest and a processing fee.
Sentiment: Strong Buy
No I didn't buy them I did post a breakdown of the reason why an insider bought them and value of there return. I have been look at them seriously now to add to my income portfolio or a tax sheltered account.