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Cubic Corporation Message Board

realinvestmentstrategies 133 posts  |  Last Activity: Dec 23, 2014 6:12 PM Member since: Feb 27, 2002
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  • Reply to

    Opportunities :

    by buzerbitter Dec 23, 2014 1:42 PM
    realinvestmentstrategies realinvestmentstrategies Dec 23, 2014 6:12 PM Flag

    USEG also is forecast to be losing $10 million next year. Although the low amount of debt makes them less distressed than a few others, there might not be that much extra cash available.

  • Reply to

    Oh no, not The Street.....

    by keltus1952 Dec 16, 2014 1:52 PM
    realinvestmentstrategies realinvestmentstrategies Dec 22, 2014 11:41 AM Flag

    So the Street waits for USEG to fall from the mid fours, all the way to a buck twenty before issuing a sell recommendation right at the bottom. Great advice, huh?

  • Reply to


    by freshbone1 Dec 20, 2014 8:46 PM
    realinvestmentstrategies realinvestmentstrategies Dec 21, 2014 10:59 AM Flag

    It's a reverse merger, including Flatonia goes to 14 million shares. Oak Valley adding its property and $107 million cash, Flatonia adding property. Proforma book value at about $26 per share.

  • Reply to

    I've done some digging .

    by bcfbubba Dec 17, 2014 1:22 PM
    realinvestmentstrategies realinvestmentstrategies Dec 19, 2014 5:11 PM Flag

    EOX has so much debt that it is much more vulnerable to insolvency if oil prices stay down for a long time. However if oil prices rebound in a few months, you are probably right, EOX would get a bigger bounce than USEG due to the reverse side of its leverage.

    IMO, no one knows where oil prices are going. Not even T Boone Pickens. Good luck.

  • realinvestmentstrategies by realinvestmentstrategies Dec 19, 2014 2:02 PM Flag

    I wonder if the merger was authorized?

  • Reply to

    Ok - I hit this one RIGHT ON THE NOSE AGAIN

    by booleansearcher Dec 18, 2014 7:28 AM
    realinvestmentstrategies realinvestmentstrategies Dec 18, 2014 6:51 PM Flag

    Westcoast is a big picture guy just like you. He told us when to sell in the 4's and he was right. Now he is telling us to buy.

    Maybe it's time to back up the truck and use this low USEG entry point to cover your LEI losses.

  • Reply to

    Anyone know any other low debt oil stocks?

    by panalta2000 Dec 15, 2014 7:39 PM
    realinvestmentstrategies realinvestmentstrategies Dec 15, 2014 8:51 PM Flag

    Assuming the merger goes through, ESTE will have $107 million cash with no debt. It looks like the oil properties outside of cash are selling at half projected book value.

    Shareholders vote Dec. 19th, don't know the date required by other side to make the merger official, also the merger is not guaranteed until it is done.

  • Reply to

    David Veltri

    by richardclovis Dec 15, 2014 8:50 AM
    realinvestmentstrategies realinvestmentstrategies Dec 15, 2014 9:07 AM Flag

    The talking heads spent the weekend discussing the three wedges...Eagle Ford, Permian and Bakken....Bakken has the highest cost structure, Permian is in the middle and Eagle Ford is the lowest.

  • Reply to

    Long lived properties

    by realinvestmentstrategies Dec 13, 2014 12:22 PM
    realinvestmentstrategies realinvestmentstrategies Dec 14, 2014 5:49 PM Flag

    Chuck I made a comparison to year end reserve valuations and the comment is valid.

    I do not work for AREX, nor any other oil company. You have no idea whether I have a clue or not, so why say it?

  • Reply to

    Banks Field

    by richardclovis Dec 13, 2014 7:08 PM
    realinvestmentstrategies realinvestmentstrategies Dec 14, 2014 11:18 AM Flag

    The Banks Field will be immaterial to the new merged Earthstone company....probably accounting for about 10% of the new company's revenues. Earthstone shareholders vote on Dec. 19th.

    What's interesting about the new proposed company is the cash. $107 million with no debt, at a time when many E & P companies are vulnerable to covenant violations. 2015 is looking like a year where cash is king.

  • realinvestmentstrategies by realinvestmentstrategies Dec 13, 2014 12:22 PM Flag

    Just looking at the AREX standardized measure of discounted cash flow, it is discounted by 73% for time value, or almost 13 years average.

    It is more common to see a 30-40% discount for time value representing 4-6 years average.

    IMO, the length of time it will take to get AREX reserves into production is accelerating the share price drop, also leveraging the chance of properties impairments and debt covenant violations.

  • Reply to


    by bc_i_lsn Dec 12, 2014 12:32 PM
    realinvestmentstrategies realinvestmentstrategies Dec 13, 2014 12:04 PM Flag

    You gotta admit, this has been one of the more incredible market moves with oil prices collapsing like they have.

    IMO, no one knows where oil prices might be in a year or two, so it makes sense to look at different scenarios.

    Let’s say this fracking technology can spread to other parts of the world and this permanently shifts the supply/demand curve, almost like an infinite supply of oil. Thus prices permanently stay in the $40,50 60 range. Within 15 months, USEG would take collective impairments to its oil properties, maybe $40-50 million in charges before stabilizing. It might even put USEG into a cash crunch.

    On the other hand, a collapse in oil like this is not unprecedented, usually it rebounds back within a few months or a year or two. We are seeing massive cuts in capital spending plans worldwide, so it would seem logical to expect output to realign with demand, possibly quite soon.

    USEG is trading at 30% of book value, and probably 20% of what its properties were worth even last summer. There’s lots of upside potential in an oil price rebound. Then we have the other issues, like cash coming in from the uranium mine, a potential moly mine solution, even the departure of Mark Larsen with his replacement about to be announced makes things interesting.

  • Reply to

    Historically speaking...

    by lordigeorge Dec 12, 2014 8:19 PM
    realinvestmentstrategies realinvestmentstrategies Dec 12, 2014 10:24 PM Flag

    The last downturn was economic. This one may be political.

  • Reply to

    OK - another week

    by booleansearcher Dec 7, 2014 8:36 PM
    realinvestmentstrategies realinvestmentstrategies Dec 11, 2014 12:41 PM Flag

    When the merger closes, there will be $107 million of cash on hand, representing $7.75 per share of cash.

  • Reply to

    Are you serious?

    by khalid_de_jeddah Dec 8, 2014 5:30 PM
    realinvestmentstrategies realinvestmentstrategies Dec 8, 2014 6:30 PM Flag

    Believe me, I feel your pain.

    If you’ll go to Investorvillage and look at the BRY repost thread, there are 39 oil stocks listed. If you do a 50 day moving average and 200 day moving average, you will find that all are down massively, and at least a quarter of them are down more the USEG. It is a sector collapse.

    So can USEG survive? Again, looking at the list, USEG had the lowest ratio of debt of the entire sector. However, I do expect USEG to have a real bad 2015, price per barrel of oil might be 35% less than in 2014. Plus it looks like the new wells might be delayed, so overall production might also take a hit. But if they don't drill much, there won't be much cash drain.

    There might also be some cash coming in from the uranium mine next year, if it does it will be found money and found profits for an old written off asset.

    I don’t expect USEG properties to be impaired soon. There is such a PV-10 cushion that the company should be fully protected through Q2 2015 and if they show added reserves maybe they will be protected from impairment for all of 2015.

    Oil companies should be valued based on the worth of their long lived assets. USEG trades at on 35% of bookvalue and probably only 20% of what its PV-10 show, also not giving much credit for the mines. I’ve traded stocks for 40 years and seen numerous aberrations in times of panic that make no sense, especially with small caps. Not to mention that there might be some tax selling. So as my last comment, if USEG survives intact, the share price will rebound once the dust settles on oil.

  • Reply to

    New Lows

    by ironblls Dec 4, 2014 8:57 PM
    realinvestmentstrategies realinvestmentstrategies Dec 7, 2014 10:33 PM Flag

    USEG has a much better premium in its PV-10 value over book, as opposed to HK. That means HK is much more vulnerable to an impairment, and given HK's high debt leverage, its net book value could be wiped out in a couple of quarters. That won't happen to USEG.

  • realinvestmentstrategies by realinvestmentstrategies Dec 7, 2014 9:21 PM Flag

    While this company has an unbelievable amount of debt, I noticed most are long term notes not due for years. I couldn't tell if there are loan covenants that could be tripped to accelerate the due dates.

  • Reply to

    New Lows

    by ironblls Dec 4, 2014 8:57 PM
    realinvestmentstrategies realinvestmentstrategies Dec 5, 2014 8:56 PM Flag

    Dan, in retrospect that looks like a good move because you can get more than twice the shares you had for the same money.

    The oils have all been hammered and some like USEG probably without good reason. There was a post on Investorvillage showing 39 E & P companies with their debt load and USEG was in the best shape of them all. So it should weather the storm without any near or mid term cash problem.

    Oil properties are long lived assets, often over ten years. So the stock value shouldn’t go back and forth so quickly based on short term spikes in oil prices. T Boone Pickens forecasted on Cramer the other night that oil will be back to $100 within six months. But even if Pickens is wrong, it seems odd this company would trade at only 36% of its book value.

  • Reply to

    Reverse merger

    by acassente Dec 5, 2014 12:27 PM
    realinvestmentstrategies realinvestmentstrategies Dec 5, 2014 1:13 PM Flag

    Take a look at what ESTE is just doing with Oakvalley.

  • Reply to

    where is the bottom on this?

    by bc_i_lsn Dec 4, 2014 1:00 PM
    realinvestmentstrategies realinvestmentstrategies Dec 4, 2014 10:32 PM Flag

    In the financial collapse, I found companies that could be acquired for a third of their cash. Basically the business could have been dissolved for nothing and the acquirer would have gotten three times his money. Of course those stocks eventually came back, but their prices were beaten down for months.

    I suspect the same thing might be happening with USEG. The oil hedge funds might have customers redeeming their shares, so they have to liquidate even if there aren't enough buyers.

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