Just started this position today for 500 shares @ 34.50, things I don't like are 60-70 cents different in price and transportation constrain in Macellus, other than that the production growth is very good, just took a very big profit from mhr which has their own pipeline, I do like mhr more since they have their own pipeline ad can get market price for the Nat gas but they are still in the early stage as far as production concern.
I agree ht0629, GE is positioned the company for sale, since it's easier to sale the company with no debt than with alot of debt and exit rate for next year will likely be around 40k+ and pipe line in utica and macellus is very valuable 2 bill + by the end of next year, in COG conference call, they said it takes longer time to get pipe line permit from local and state govt to approve and they received 60-65 cents lower than normal price for their Nat gas in Macellus, since they do not have the pipe line to connect to interstate pipe line, $15 is a reasonable target price with the pipe line and production of next year, I'm only have small 2016 call option left that i'm down on it but I'm looking to get in after secondary offering, I think there will be some discount to current share price.
Hi Lex, thank your for your good comments and for providing very good analysts in this board for the past 2 years, You're right about my tax situation, however, from now to the end of year, I think I can make some more profit to cover some of the tax, there are other names that I like such as COG for Nat gas play, they just reported very good quarter but the stock took a hit because they're getting .60-.65 cent below NYMEX price/MMBtu for alot of their Macellus production or under value insurance copany like AIG or HIG which have not thing this year, with regard to dilution, I agree that it will depends on asset sales, but I think GE wants to buy more property, 10% dilution of warrant (17 mil shares) + additional 20 mil shares is about 21% dilution but if the stock stay below $8, this will be very difficult to price secondary offering above $8, I think will see share price between $7-8 for a while until this issue is clear and I still have 3000 shares of warrant iif I'm wrong and share price goes to $10 or $11 in the next couple months, for sure GE will call $8.50 warrant and I can get in at that point. 20% down from this point will put share price at around $6.5 and I hope this does not happen, I still like the long term story but I'm in the wait and see mode, good luck to you Lex
I'm 100% agree with you ht0629 that the stock worth $12+ but based on GE comments in CC on my last post, there might be another 40 mil shares ($300+mil) of secondary offering in near future to pay off all the debt, that is why I sold the shares to protect my 100% gain, in the last secondary offering of 30 mil shares in may 2012, shares drop 20%+ very quickly, I will feel bad if the stock jumps up 20% tomorrow to miss out potential of $40-50k in profit but I will feel even worst to lose $40-50k in profit if it goes down another 20% in the next few weeks
Thank you ht0629, I still have 3000 shares of warrant, I don't think the share price will move above $8.50 anytime soon, so GE might have to lower the price but I still like the long term story, I think the stock worth $12 but I know market hate uncertainty, once the balance sheet is in order, I'm willing to pay more for the share price but for now, I do not want to give back 50% of my profit, good luck to you ht0629
Thank you everyone for posting very helpful comments/analysts/opinions on this board, it helps alot, since I'm very new to investing, I just started about 2 years ago after college using second mortage loan from my home, I just sold 30k shares and 500 contracts may option for 100% gain, I'm looking to get back in at high 6 or low 7 once the dust settle.
with the share price around only $8, we will have to add 40 mil share to get $320 mil, alot shares to be added
Capital One Southcoast, Inc.
"Okay. And then just lastly for me. I know in the press release this morning mentioned potential capital market financings. Could you elaborate a little bit on the options there?"
"Well, obviously the stock had great performance this year and we'll continue to monitor our liquidity and things we haven't you know as I mentioned we have these warrants that we issued when the stock was so cheap last year and our Board of Directors had ability with respect to those warrants to reduce exercise price if we want to call in capital.
So we do plan to list those warrants so they can trade with our shareholders so, I think we are geared more to more common stock type equity raises in the future we want to clean up a potential preferreds, we want to hopefully get the convertible, handle this year. So you really see a dramatic change in the balance sheet in 2014 with Series C perpetual preferred is par now, the Series D becomes callable next month in March. Then the Series E is a convertible the stock gets around 10 to 11 we can convert, post conversion.
So we feel based on the results we're going to have this year, we can continue to clean up the balance sheet in excess the capital markets as we deem fit."
Series C = $100 mil,
Series D = $ 221.2 mil
Series E = $95.1 mil can be convert at $11
Convert warrant share = $150 mil
so based on what GE said, at least Series C and D of $321 will be paid by issuing common stock.
While the quarter was soild, conference call was horrible, I was expected some thing good in the conference call, GE should have waited to talk about acquiring 250k acres after couple more utica wells result and should have gave a time line for monetizing the pipeline, market hates bad balance sheet, just look at Hk for an example, while I still like long term story, I'm not sure about short term, if call, $8.50 warrant will bring in almost $150 mill which will help alot but I think market will need to see more of good result for the share price to go back above and stay above $8.50, lowering the price for warrant will not help without any positive results and will further drive down the share price
The quarter is solid, I think the pipe line value now is 1.5-2 bill or 900 mil -1.2 bill for mhr and if they MLP the pipe line, mhr and ArcLight Capital Partners can just sell 50% each and keep the remaining 50% of share of MLP, so mhr can still maintain majority of the share owner for MLP.
Most of the Nat gas play in Utica are down, RRC -2.11%, GPOR -2.6%, AR -0.87%, I won't read into it too much, if short sellers are so smart, they would have already bought shares after Egle sale and when accounting issue was cleared, short interest have not changed by much since then but the share price keep raising, utica and value of the pipe line keep raising every day, so shorts are not making anything
whoever sold the shares today will regret because share price will goes to $10 after next week. No reason to announce bad news on Monday like they did when the stalder well got delayed and they announced on Friday afternoon
-Current Eureka Hunter thoroughput of 198,000 mmbtu/d
-Will see more of 32.5-40 MMCF per day wells from Utica next coming month
- 18 wells Stalder Pad should output 250 + MMCF per day
- Sold 20 mcf/d for 12/mcf this month (seem very high but that what he said)
- Recent transaction of utica is $15-16k per acreage, Citi said Mhr acreage is better than COG and CEO of COG says the acreage is worth 100k+/acreage
- Contiune asset sale 200-300 mil this year
- Want to be in just Utica and Marcellus in the future.
My prediction, GE will sell Williston Basin some time next year for 200-300 mil and focus on Utica with exit rate in 2015 of 45-50 Boepd and should be able to fund drilling with cashflow, with the share price of $15-20 in Jan 2016
Wunderlich Securities maintained a Buy rating on Magnum Hunter (NYSE: MHR) with a price target of $10.00. Analyst Irene O. Haas adjusted estimates to reflect the impact of weather on Appalachia operations.
"Recent extreme cold weather has impacted Magnum Hunter's (MHR) ability to complete Utica and Marcellus wells and bring them on production. A Form 8-K was filed last Friday disclosing the impact. According to the company's most recent presentation, the wells from the Stalder and Mill Wetzel Pads are likely to see delays of 4 weeks," said Haas.
"For 1Q14, we dialed down our volume estimate from 21,018 boepd to 17,881 boepd. For 2014, we now expect production of 23,451, down from our prior estimate of 24,385 boepd; our 2015 production is now at 34,277 boepd, down slightly from our prior estimate of 34,961 boepd. We also adjusted our LOE and DD&A upward for 2014 and 2015 to reflect 4Q13 cost structure. This resulted in a decrease in our 2014 and 2015 estimates," added the analyst
After the results are released, some time next week I think the share price will go back up to between $9-10
As I said yesterday, in Feb presentation that just recently came out. Stalder #3UH in Monroe County, Ohio suppose to be online today, with estimated gross production of 3750 Boe/d and 22,500 Mcfe/d and estimated net production 1474 Boe/d and 8,845 Mcfe/d; if these result are true, they are very good result and comparable with other producers in the area. I don't see any reason of why GE does not make the announcement on Stalder #3UH, in order to put this in the presentation as being online today, I think they must have at lest IP-30 days rate, I do not trust GE but I know there is more incentive for him to get the share price to go up since he own 5 mil + shares, showing good result will force shorts to cover and bring in new investors.
In the new Feb presentation, estimated net production of Stalder #3UH has increased to 1474 Boe/d and 8845 Mcfe/d from Jan presentaton of 664 Boe/d and 3983 Mcfe/d, and it supposes to be online 5 Feb
I agree with Real Money article about Mhr except I think pipeline might worth little bite more (1.5-2 billion) in early 2015.
"Magnum Hunter's reserve valuation (as of Dec. 31, 2013, so very recent) is $922 million, and the next step is to value its undeveloped acreage. I used $12,500 per acre for its Utica assets and much lower valuations for their Bakken and Marcellus assets. Giving Magnum Hunter credit for a $1 billion valuation on its Eureka Hunter pipeline asset (Magnum Hunter owns 58%, and I am more convinced than ever that is a billion-dollar asset) and stripping out Magnum's $1.07 billion of debt and preferred stock leaves a fair value per share of $12.25.
That is a huge premium to Magnum Hunter's current share price of $8.24. That analysis is possibly conservative (the company is getting very little reserve credit for its Utica assets because its production there is so new), and this is the reason I am buying MHR shares today for my clients."
Last night in his speech, President Obama expressed support for Nat Gas to power Vehicle, he asked congress to put people to work building fueling station, he said "bridge fuel that can power out economy with les of the carbon pollution that causes climate chage" and he wants to cut gov redtab for drilling permit, Mhr is on the right side
Seem like buyer is stepping in today, not too bad, since the DOW is down almost 2%, if the weather stay cold for the next two months with good new from Utica, this stock will goes to 10+ easily. Overall is very good week for Mhr, only down less than 40 cents.