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Cubic Corporation Message Board

realinvestmentstrategies 32 posts  |  Last Activity: Jul 22, 2015 11:24 PM Member since: Feb 27, 2002
  • Reply to


    by icy_vaynes Jul 20, 2015 3:40 PM
    realinvestmentstrategies realinvestmentstrategies Jul 22, 2015 11:24 PM Flag

    I am not making a prediction on oil, IMO no one knows. It is political, OPEC production is up 1.5 boe/day since the beginning of the year. At some point I suspect OPEC will try and raise the price, but who knows when.

    USEG will not file bk for quite a while. It may start diluting shares, it may get some junk debt, it might sell off some property at fire sale prices. The longer oil stays at $50, the more USEG shares are permanently hurt.

    But back to your original question for a realistic scenario and the answer is $80 oil.

  • Reply to


    by icy_vaynes Jul 20, 2015 3:40 PM
    realinvestmentstrategies realinvestmentstrategies Jul 22, 2015 3:46 PM Flag

    $80 oil by year end?

  • Reply to

    Delisting on the way

    by ademon4u Jul 16, 2015 11:36 AM
    realinvestmentstrategies realinvestmentstrategies Jul 16, 2015 1:57 PM Flag

    Delistings usually take more than a year, appeals are usually granted with extensions. So that's the least of USEG's problems. A bigger question might be what happens to the share price if oil stays at current levels indefinitely.

  • realinvestmentstrategies realinvestmentstrategies Jul 14, 2015 7:56 PM Flag

    10-K filed, a little late, but understandable. Results could have been much worse.

  • Reply to

    Evidently , the financial covenent problem

    by bcfbubba Jul 6, 2015 10:09 AM
    realinvestmentstrategies realinvestmentstrategies Jul 6, 2015 11:13 AM Flag

    Actually the company has made some very good an frank disclosures. For instance, USEG was about the only company to make a specific warning in its 10-K report about the impairment charges in the event WTI crude stays at $50 all year. Here is the disclosure in case you missed it.

    --- Recent declines in the price of oil have significantly increased the risk of a ceiling test write-down. For example, we expect to use $82.72 per barrel for oil and $3.84 per MMbtu for natural gas to compute the ceiling test limit as of March 31, 2015. Had these prices been used to compute the ceiling test limit as of December 31, 2014 and all other variables (including applicable differentials) remained unchanged, we would have incurred a ceiling test write-down of approximately $14 million. Further, if we assume that the oil price is $50 per barrel for the remainder of 2015, the oil prices used in the ceiling test limit calculation would be approximately $70.06, $57.63 and $50.11 at June 30, 2015, September 30, 2015 and December 31, 2015, respectively. Had these oil prices been used to compute the ceiling test limit as of December 31, 2014, we would have incurred ceiling test write-downs of approximately $31 million, $44 million and $51 million, respectively---

  • Reply to

    Evidently , the financial covenent problem

    by bcfbubba Jul 6, 2015 10:09 AM
    realinvestmentstrategies realinvestmentstrategies Jul 6, 2015 10:57 AM Flag

    The covenant violation would occur once they finish the Q2 report, which is about 35 more days.

    Typically on a first covenant violation the bank gets a bit tougher, they start insisting on frequent cash flow forecasts, maybe a quarterly bank audit, raise the interest rate a bit, require extra collateral, or chop the size of the loan,etc. It's just a first step of work out, it would be unusual to see the loan called at this point.

  • realinvestmentstrategies realinvestmentstrategies Jul 3, 2015 8:14 AM Flag

    Lots of bank credit? How do you come to that conclusion?

  • Reply to

    Bought Back In Today

    by fastballstrike3 Jun 30, 2015 3:30 PM
    realinvestmentstrategies realinvestmentstrategies Jun 30, 2015 8:47 PM Flag

    The severe reduction in last year's PV-10 vs year end 2013 came from a drastic cut of proved reserves in the Texas properties, where they went from 1.27 million down to 672 thousand.

    There is also the five year rule where USEG disclosed...---Additionally, no proved undeveloped reserves are scheduled for development beyond five years of initial booking.--- in their 10K. I suspect this means development plans in 2013 were moved out several years, therefore some of the BOE could no longer be classified as proved or part of the PV-10.

    There also seems to be quite a bit of confusion regarding EUR's in developed Buda wells. The recent investor slides show estimates EUR's of 200-400 mboe, yet all the developed wells have shown rapid decline rates such that it doesn't seem they would get to every get to 100 mboe in cumulative production.

  • Reply to

    Math test

    by ademon4u Jun 29, 2015 8:34 PM
    realinvestmentstrategies realinvestmentstrategies Jun 29, 2015 11:37 PM Flag

    If the moly mine went from an asset to a liability, you might see that 80% write down in one quarter.

    However, we might be approaching the end to oil property write-offs. Probably a bad Q2, but more reserves will be established by Q3 and offset the lower price benchmark.

  • Reply to

    time to buy soon

    by friulliguy Jun 27, 2015 1:14 PM
    realinvestmentstrategies realinvestmentstrategies Jun 27, 2015 6:24 PM Flag

    Profit next quarter? Not a chance.

  • Reply to

    Cost Saving Measures

    by richardclovis Jun 25, 2015 7:16 AM
    realinvestmentstrategies realinvestmentstrategies Jun 25, 2015 1:08 PM Flag

    Instead of selling the mine, maybe they should sell the Booth Tortuga lease with all the Buda properties. At least it might have some buyers.

  • Reply to

    EXCO appears to be a logical buyer for USEG .

    by catch007afire Jun 23, 2015 1:31 PM
    realinvestmentstrategies realinvestmentstrategies Jun 24, 2015 12:12 AM Flag

    I doubt they could find any buyer for the whole company, oil is so different than the moly mine mess.

    I wonder what it might be worth if USEG sold the Buda wells. That whole South Texas property showed a PV-10 of only $23 million at year end.. Could it get more than $23 million?

  • realinvestmentstrategies realinvestmentstrategies Jun 20, 2015 8:22 AM Flag

    It wasn't too long ago that USEG had investor slides showing the South Texas properties with a potential PV-10 value of $140 million on single spacing or $280 million with double spacing.

    Yet at year end, the PV-10 valuation for these same properties came in at only $23 million, partly due to the decline on oil prices, but also due to dismal production results in the Buda wells once they passed a few months of operation.

    It seems there is a wide range of ways to value this property depending on the planned timing for production and long term estimates for oil prices. It might be nice to get more details of this property, at least tell us what they know. The oil is still in the ground, so how much is there?

  • Reply to

    How low could it go ??

    by chunlui88 Jun 18, 2015 12:12 PM
    realinvestmentstrategies realinvestmentstrategies Jun 18, 2015 10:31 PM Flag

    At some point we may have reached bottom and get a nice rebound. You just need the guts to catch a falling knife.

  • Reply to

    Heading toward delisting if nothing good happens

    by margin321 Jun 18, 2015 7:47 AM
    realinvestmentstrategies realinvestmentstrategies Jun 18, 2015 9:02 AM Flag

    I've followed that issue with LEI, they've had a second life for almost a year and a half, so it is likely that USEG also would get listing extensions for quite a while.

  • Reply to

    Amended S-3 limits common stock

    by bcfbubba Jun 17, 2015 9:39 AM
    realinvestmentstrategies realinvestmentstrategies Jun 17, 2015 11:42 PM Flag

    This might be one of the defining moments that determines USEG share price this year. We already know the company will need more operating funds now that the line of credit has been so badly constrained. This document suggests that there will be more capital without any more than a 1/3 dilution.

    So it's a matter of whether the potential share dilution justifies the current level of discounted share price. Survivability beyond the next twelve months might also be a question mark. IMO, the share price could go drastically either way at this point, let's see if we get any better insight after next week's investor conference. The company owes investors some real information.

  • Reply to

    Presentation desires .

    by rufus_jones_the_3rd Jun 15, 2015 1:37 PM
    realinvestmentstrategies realinvestmentstrategies Jun 15, 2015 7:49 PM Flag

    At this point, Keith Larsen has such a credibility problem, making all those comments about continuing to actively seek accretive acquisitions or saying on a conference call that banking relations are good. When in reality their credit got cut much more in proportion to other companies, they’ve registered for a huge share dilution and they’ve announced that they will violate their loan covenant in Q2, 2015.

    If the company really has some misunderstood value, they might use this conference to explain a little more about the mine, the reasons for surprising low production in South Texas, what they can do about the upcoming loan covenant violation, how they will make payroll for the rest of the year, and whether they really intend to dilute existing shareholders by up to 90% as might be possible with the shelf registration. Without that, why should anyone buy the existing shares?

  • Reply to

    No sense

    by hiker200055 May 29, 2015 3:07 PM
    realinvestmentstrategies realinvestmentstrategies Jun 1, 2015 9:47 PM Flag

    But can it do a repeat?

  • Reply to

    The float is 4.2M shares

    by arfmooocat May 27, 2015 11:31 AM
    realinvestmentstrategies realinvestmentstrategies May 27, 2015 11:45 AM Flag

    I come up with a bit more than 5.5 million shares, but at any rate, more shares have traded today than are in existence!

  • realinvestmentstrategies realinvestmentstrategies May 26, 2015 10:01 PM Flag

    The company's book value was over $46/share post/split for the quarter ending March 31, 2015. While there might be some more write-downs, there have already been considerable write-downs in the last few months.

    Emerald has enough cash to wait this thing out a couple of years. Their assets will regain their previous market value if oil prices rebound over the same two years. Why not just hold on a bit and let it work out?

    There's no need to screw things up for the shareholders just to get a bit more property?

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