I read DiLallo's regurgitation of the Bloomberg piece and I too tried to post a comment, but to no avail. I cant believe that Bloomberg and MF question the debt level of MHR without making specific mention of the fact that if MHR simply monetizes the pipeline, $600m to $700m of the debt can be paid off in one stroke. THAT is the most important factor in explaining why the current debt level is not too high considering ebitda levels. For the so-called "pros" not to comment on this giant factor shows how little credibility they have. At least DiLallo referenced the presentation slides with asset values that contains a one line reference to the pipeline....
The bottom line (IMO) is that KOG can become a Utica-Marcellus pure-play company with NO debt whenever it wants by selling the pipeline and Williston assets. GLTALs Lex
Man you like to argue. I told you I verified my representation before I made it. Sure, you can calculate a short interest percentage in reference to the float also, but the Definition is against outstanding shares. Here is the quote: Tell me I am wrong again and you are a better source of information than Investopedia.
Investopedia explains 'Short Interest'
Definition of 'Short Interest':
Short interest can be expressed as a percentage by dividing the number of shares sold short by the total number of outstanding shares.
0 for 4 now, and forgive me for pointing out the obvious, but you began this idiotic back and forth with "shorting moves shares to the sideline" -- since then you want to argue about everything but your nonsensical premise that I took issue with. But again, tell you YOU are the source of all correct information and Investopedia has its head up its aqq. You are a work of art, or I guess drama queen fits a bit better, eh?
I am done spending time with you as your one of those posters who considers himself always right no matter how many inaccurate things they say. I misspoke once, admitted it, and moved on. Anyone reading this thread can figure out who is right. Later....
Look it up on investopedia numbnut. I verified it before I wrote you back. 0 for 3 now....
Need to admit my mistatement using the word float reacting so quickly to your numbnut statement. Should have said they add to the sharecount in play. But you? Remove shares to the sidelines? And YOUR comment on float is wrong as well as short interest is calculated on outstanding shares, not float. So now your 0 for 2 and back to McFly status.
Spdrama: Shorts "simply remove shares to the sidelines" eh? You go on and on as if you understand shorts, and then offer this remark? Incredible.... Shorts do just the opposite, they add shares to the float. Hello? McFly??? Is there anything in there???
Slab: I agree with your view that GE doesn't sell the Bakken anytime soon, if at all. He is a financial guy and is OK with debt as a tool for growth. Borrow at 10% and drill wells with 65% to 85% IRRs all day long. MHR is so far away from being cash flow positive it is almost a joke; HOWEVER, with the Bakken and pipeline available for sale to cover debt, MHR share price remains solid as everyone awaits a prove up of the south Utica acreage. He doesn't have to sell it right now as he has other sources of funds with his new partner and other asset sales, and it would hurt his CF and borrowing base, so it doesn't make sense to sell. But as long as the market thinks he might sell, and reduce some of the debt, life is good.
At some point though, he has to deliver on production. We are half way through 2014 and Farley is still not hooked up and the Mills Wetzel wells aren't hooked up and all that was supposed to happen LAST YEAR. I was thinking 2014 was going to be our year, Hate to say it, but I think we are now looking at 2015.... good luck on your travels....
I think the answer to your question is because this information is accurate. The annual income statement shows the company made $6.119m of net income for about 88 million shares.
By the way, my guess is GE doesn't sell the Bakken until, at minimum, the Farley pad is hooked up because he needs some "full value cash flow" associated with at least 4500 mboepd of his current 20,000 boepd production being actual oil revenue. That is, where MHR is getting $90+ dollars per barrel vs $5.00/mcf x 6 = $30 of "equivalent value cash flow." Selling off that cash glow and the related reserves would hinder MHR further as this point in its development.
Realize the CF from the oil production MHR has now, is approx. the same as the CF MHR will have at the end of the year from non-Bakken production IF IF IF Mhr gets to the 32,500 exit rate. 4500 bopd oil x $90 x 365 days = $148m. 32,500 less the 4500 bakken = 28,000 Boepd. Assume 25% liquids production and you have 7000 x $40x 365 = $102m and 21000 x 5 x 365 = $38m for total of $140m non-bakken (and my calcs assume all 4500 a day from Bakken is oil with no gas) Selling he Bakken -- in my opinion -- is NOT what GE wants or can afford to do until he has the Marcellus and Utica really flowing well.
Middle of next year maybe???? Just my two cents with reasoned calculations. Lex
Several posters have wondered what the Bakken acreage is worth and I have looked at that issue a few times and offered by "reasoned guesses."
Looking at the various presentations (current and past) where GE values acreage in various value ranges and then regularly gets less than his projected range, I think the absolute best case price MHR could get for selling the Bakken properties would $450m and my gut tells me it would be more like $375-$400m based on (a) GE's track record, and (b) MHR's proved developed Bakken acreage NOT being in the core of the play (MHR avg 450 EUR well range vs 650-950 in the core).
I estimate the best case scenario as follows: 8,500 noncore acres at 2500 an acre is $21m; 50,000 undeveloped at 2500 an acre is $125m; and 38,000 developed at 8000 an acre best case = $304m. Sum of 21 + 125 + 304 = $450m best case. If the proved developed acreage only gets $6000 an acre, you are looking at $375m.
Since MHR is low on cash, these JVs are an excellent way to increase production and cash flow at a slightly better expense ratio. Sounds like the first pad wont be that big for MHR with only a 14% interest, but the second pad with 87% should be great for us and, it is the second pad where we have overlapping Utica and Marcellus acreage. Perhaps the biggest factor for me, but one not in the press release, is whose rig is doing the drilling. I trust it is Edgemarc's since the first pad being drilled has Edgemarc with such a high interest. If accurate, this is great as it adds another rig to the MHR production equation. Lex
Marvin: Not challenging overall premise of your note, but hard to consider MHR a "baby oil" anymore given giant shift back to gas. I think this is one of the reasons MHR's share price has not be ramping up quite like the KOGs and TPLMs. While GE likes to quote flow rates in terms of mboe, MHR is getting about one-fourth to one-third of the true oil-based revenues even with the 4500+ bopd it is producing from the Bakken and all the NGLs it is producing in the Marcellus. Just a thought....
If so, could you kindly provide any insights offered? Thank you. Lex
Swag: Owning shale assets -- your reference this time around -- is quite different than proclaiming that the company has enough Wolfcamp acreage to pay off all its debt. Just going by what management said???? I think not.
Two days in a row that the PPS was within .05 of the 52 week and five year high. It doesn't get much better than this as a prime time to announce a new share issuance. Neither the ATM or the preferred issuance offers enough to substantially de-lever as management has indicated it wants to do, so Hal needs to issue shares and his yield is finally back below 9%. While that is still a high rate to pay for funds, he simply lacks access to a lot more debt given BBEPs current leverage and, if we are going to grow, new shares are simply part of the game. Six months ago, Hal issued shares around $18.25 and now the PPS is nearing $22.25. Time to pull the trigger -- particularly with the Iraq premium baked into current prices and no production update anticipated for another two months. Just my two cents and hoping he pulls the trigger quickly and does not lose this opportunity! Lex.
Just saw this thread. Memp doesn't have a great deal of Permian acreage to begin with, and very little is even in the same counties as the Wolfcamp formation, so that probably tells you why the company doesn't even list Wolfcamp in its formation list. Quickly eyeballing the company's presentation, MEMP has Permian acreage spread amongst 23 counties and only two of those counties appear to be over the Wolfcamp. SWgastar simply has no clue what he is talking about with his "enough land to pay debt" claim. .
Win: I am not arguing with you at all and trust you are spot on in thinking 16 cents per share is too low; I was just commenting on the fact that you prior post did not seem to take into account the special one time items. But I am certainly with you on the future prospects being bright, particularly with a well-incentivized CEO that is already hiring chief executive officers for Rockpile and Caliber in preparation for future spinoffs or monetization. Lex
G8: you have that right with your "liberal use of ignore feature" remark. Heck, when I scan the board by messages (vs topics) over half the posts are missing based on my having already put so many of the trash talking posters on ignore. I do wish, however, that a number of the smart posters would simply choose to ignore the knucklehead posters rather than repeatedly engage them. That too would help the board's content IMO. Lex
Win: I think TPLM will have a great Q2, but the 16 cent estimate is still better than Q1's 13 cent result taking out the special items. In other words, even at 16 cents, the analysts are predicting a 23% jump in quarter over quarter earnings from operations. Lex
i certainly agree that, depending on the pps advancement, it makes sense to repurchase, or at least roll, your higher leg short calls. I already have a 7.5 to 10 spread on tplm for octoberr and am now thinking about rolling the 10s forward to 12.50. will likely do that on next dip, and if not all the contracts, at least roll 50 of them. Did that with a 120 contract September KOG spread I had between 9 and 12, where I rolled half the short contracts forward to 15, and now have a 50 contract 9 to 12 (should be a no brainer) and the other 60 now spread 9 to 15. of course, this is all in addition to my long KOG shares that I have had since BEXP got bought out and I moved into KOG--shares that I will continue to hold LT. A lot of people have "trading shares" but I dont fancy myself well suited to pick up extra $ trading in and out; rather, I play this bull call spread game seeking multiples of return on a smaller number of shares, but always reducing risk by selling the higher leg. Of all the strategies I have tried over the years, this conservative bull call spread starting out in the money has proved the most reiliable. Thus, I am something of a broken record when I recommend these types of option plays -- the PPs doesnt need to go anywhere for me to profit and the returns at 6 to 15 months out result in my winning the game at least 3 of 4 times, which I am super happy with. I particularly like to do in in October with forward year leap spreads to minimize taxes, but buying completely OTM spreads sometimes bites me in the tail when new share issuance "stalls" the PPS advance -- and that is a risk we have with TPLM as it too may issue new equity and slow down the advancement. LEAP spreads typcially give you enough time to ride thhose issues out and still hit your mark without exposing you too much on the puts of a three-legged spread.
I would love to hear any other option trading ideas on tplm as we all deal with Samuels "next 8 quarters" ... Lex
I see a lot of posters who are writing about how TPLMs share price should move forward over coming quarters and I agree. So, then, how can you profit from without taking on too much risk? While I am not a big fan in telling everyone my trades, several posters on other boards helped me learn about options by posting an occasional trade idea, and I try to do the same in a "pay it forward" context. So here is an idea to consider.
As some of you know from my prior posts, I like bull call spreads that start out in the money because I am not a high risk option trader, but like the high relative returns offered by conservative spreads. With that in mind, one trade to consider is a January 2015 bull call spread between $10 and $12.50 that I placed at a cost of $1.15 per share this morning. 100 contracts bought at $2.20 and sold at $1.05 cost a combined $11,500. With the shares trading north of $11.15 per share, the trade starts in the money and I profit if the PPS simply does not go down. Hence, starting ITM. If TPLM shares trade above $12.50 next January, the spread maxes out at $2.50 a share, you make $13,500 and that is a 115% gain over 7 months. Something that helps to boost your return on long term shares.
For those who also think (as I do) that the PPS will remain above $10 next January, you can also sell January 2015 $10 puts for $.85 a share to offset part of your cost. While I like this move, I will typically only sell up to 40% of the long contracts, as I did today. So, selling the 40 puts netted me just shy of $3400 thereby reducing my overall $11,500 investment to $8,100 and set me up to triple my money in 7 months if the PPS goes north of $12.50 a share. 25k/8.1k. Admittedly, puts come at a risk, but worst case is I buy another 4000 shares at $9.15 a share to add to my current long term position. But if the PPS continues up as I suspect, it is an $8k bet shooting for a 7 month three-bagger. Just an idea to consider. GLTALs. Lex