You can count on a reverse split and a fairly large equity dilution. As low as the price is now, it can easily go a lot lower from that announcement depending upon the exact terms. Count on that new equity getting very favorable terms at your expense
Since they told you they were going to restructure the debt and possibly have an equity injection, you should never have gotten in until you know the details of those major items. Right now you are basically flying blind
I would think that the probably of reorganization, a going concern statement on the financial statements, and even an annual report delay have grown with the silence of the last few weeks. As such Apollo has probably upped their losses on this loan quite a bit and hopefully has something to offset it with. Right now the bankers that were hired don't look like they were worth much. Not much hope anymore for the common or the preferred. The silence is deafening.
Remember one big consideration. The banks do not want these properties so most likely if that is the only issue, they would work with Miller. It is just one item on the table with Miller right now, not the whole problem by any means. I think they are probably negotiating a solution that is why the bankers were hired in the first place. Let's hope it was money well spent.
The filing does not show frustration, what it shows is a willingness to work with Miller in their situation but also the companies working with Miller are demanding protection in the event of bankruptcy so that they get their money. Its actually a decent sign. However, if the vendors move to cash up front, then the party is over. Right now, the vendors seem to acknowledge that Miller is very weak financially and in a tight condition but with proper protection, will work with the company.
I would say that Apollo and Key are very concerned right now with the repayment of the loan, and how to fix this going forward is going to be interesting as the stock price is too low to be of much help. Probably would need a reverse split and an offer of the lenders to take some equity for debt as probably some warrants as well. That discussion needs to happen soon.
Either that or we need a miracle on the production front.
13. Actions to improve the performance and consistency of operations and goals going forward so we all can tell
12. Is senior management willing to take a pay cut to enable the company to get through this??
The year end report is going to be interesting. They have a lot of explaining to do and I cannot wait to hear it. We were promised far better communications than this.
As a result of this change in tax credits, if Miller drills any new wells, they had better be low risk and come online quickly, no more RU-9. Right now I am not sure they can get themselves ready for the end of the hedges. However, if they can then they need to issue press releases indicates such.
Its kind of hard to go bankrupt when no payments are due, and this company has no payments due for a while.
you may want to review some of Don't Panick's posts on this situation. He watches these optional exchanges more than anyone else I know and is familiar with how they work. They are definitely voluntary, but usually favorable for the shareholders.
I suspect that the priority is to get the debt and payables under control to the point where Apollo backs down. Once that happens, then i think you will see some sort of exchange offer for the preferred, possibly accompanied with a reverse split, and then all kinds of possibilities.
Miller waited too long to fix this and as a result is in one heck of a tight spot. Look at Goodrich Petroleum to see another company with lots of debt who straightened things out before the shorts attacked and as a result is weathering the storm just fine. In fact, they just beat back another short attack last week, so it can be done, but you have to have your ducks in a row.
There are several kinds of credits or rebates or allowances that they can get depending upon what exactly you are talking about. I think most of the discussion focused on the drilling rebates, and tax refunds on operating losses, but any good news that gets the company money is welcome. Right now the rebates and the tax credits are what is keeping this company going. After that, Scott needs to take a salary cut.
There are other companies out there with the same cheap rate that are paying their dividiends. You don't have to pay anymore interms of the discount from the par value for preferred and the companies are still paying. This one is far more riskier.
thanks, I haven't checked when that lease expired, just figured it was not economic at these prices even with the gas contracts because of all the work that had to be done.
Don't forget Otter where they had to build a road and all before they drilled the first hole. Then fought with the state as to whether or not there was enough gas there, and then to keep the lease. Am betting that lease may be history now because they poured a lot of money into it and even with the gas, it was going to take a whole lot more to develop the lease.
If Scott still believes that much in the company, then he is going to fight very hard to avoid bankruptcy and that is a big positive.
It is a little bit optimistic in its projections, and understates the hard road ahead. But the company does have possibilities to survive. The big thing we all learned from Scott's margin call is that he really believed in the future of the company and I suspect that he still does, and that BK would be an abhorrent alternative to him. I also suspect Apollo will not push them into bankruptcy unless there is a clear path for them to get their money back, so I suspect right now the interest rate will remain high and payments will be steep until either the ratios improve or its clear reorganization is the only way out. Scott has done too many deals for BK and I personally believe that he will find a way out of this.
That being said, I am still waiting for things to clean up a lot more than they are now, but I do believe that this board should present a far more balanced picture than it has in the past.
You still don't get it do you?
First off I clearly stated that if they focus on restarting wells. Well they clearly veered off that track pretty early, not to mentioned they drilled a bunch of highly speculative gas wells and built roads to nowhere..........very speculative sites that would take a lot of money to develop. By all accounts they lost their focus and you have clearly documented that from four years ago. Thank you.
I don't even know what MCP is and have certainly never touted them. Unlike you, I rarely give a blank endorsement, I watch my investments carefully and there fore have made quite a bit of money on Miller as I have clearly explained in the past.
You have called Sword dry or uneconomic several times, without ever taking a careful pencil to the numbers. You also predicted the failure of RU-1 and RU-7 many times over.
It is becoming quite clear that you are working for others who do far more careful work than you do because there is no way you would make any money with your analysis.
Now as far as trying to discredit me, it would help if you stick with the facts instead of trying so hard to prove me correct and succeeding. It shows everyone what you are, a puppet for some big money that cannot stand on his own two feet.
SD just got a billion dollars, so I don't think you have much to worry about. and the interest rate is low enough that you know the lender's are not real worried.