These are short term concerns, whereas LNG is a very long term investment thesis. It's all about time-frame.
CRC is way oversold, and is under significant accumulation by hedge funds.
Note that anyone who follows GS is an idiot---they were predicting $200 oil not too long ago, and now they're chirping $20 just to get press coverage.
Note also that production data from the EIA (energy info agency) is not in real time but, instead, is delayed by 3+ months (they get reports from states and who, in turn, receive reports from producers). It's highly probable that oil prices will spike into the $60+ range in Q4 as the market begins to understand the true state of production & inventory levels. Unquestionably, commodity prices swing to excesses.
Haven't got a clue what you're blabbering about. You are of in never-never land, truly loony tunes.
Global oil consumption continues to grow. The current excess supply, which is actually pretty modest at 1-2%, will shrink--it's simply a matter of time.
Meanwhile security prices have far overshot on the downside. It's a fool's game to time the bottom--CRC will survive and provide superior returns over the 2-5 year time frame even at current pricec.
"I'm more afraid of a lever buy out by either management or a private equity group. "
A leveraged buyout???
There's not enough NBV for a LBO to work--no one will be willing to fund.
Looks like the market is more focused on prospects for OPEC production talks than China slow down conerns.
"22 Billion won't do it.........China stimulus a joke in comparison. "
Did you miss the $3.6TT+ part, and do you know what it means?
Hint: $22BB is just a start....
Its government reported injection of ~ $22BB into its financial system. They will do whatever it takes to support their flagging economy. With $3.6TT+ in foreign reserves, they've got plenty of firepower for stimulus.
Equities, shipping rates, etc, jumped in response to this hope generating move.
The government announced yesterday the first injection, ~$22BB, of liquidity into its financial system.
The Chinese government is motivated by historic fears of social instability to do whatever it takes to support the economy. With $3.6TT in foreign reserves, it's got a heck of a lot of firepower for economic stimulus.
On theoretical level, SA's foreign reserves can sustain it for 5 years.
In practice, it will not deplete this reserve.
Bear in mind that its current deficits don't just impact social spending, but also cuts into the capex needed for its energy infrastructure.
So, the timer is probably much, much shorter than 5 years.
"Imagine now we have a recovery in shipping by year-end and early 2016."
China is the lever, drives global bulk shipping volumes/rates. It's undergoing difficult transformation from manufacturing driven to consumer driven economy--a hugely turbulent process as underscored by today's plunge in global markets.
What's your assessment of China's situation?
Blackstone is a financial firm, invests in distressed situations where it takes full advantage of its senior lien holder status in a default situation--typically not good for distressed equity holders.
In Chap 11, shareholders have a claim to equity only when there's net book value (ie, Assets liabilities). KWK shareholders' position is exceedingly weak.
In this instance, however, Blackstone also needs the technical expertise and knowledge of the properties that KWK management possesses. Is this KWK's negotiating leverage--it possess the operating know how that is critical to Blackstone?
Even so, what prevents Blackstone from seizing the company/equity anyways, wiping out the Dardens and existing shareholders, but offer employment contracts/retention packages to the rest of management team?
"However, the fact that the bonds can be purchased at such sharp discounts and that the company chose to eliminate the distribution to provide the liquidity to buy them is undoubtedly evidence of distress"
Not to dicker over semantics, but it seems to me that management's purchase of bonds at substantial discount is not distress but opportunity. The high yields of units is distress.
Very important differences between the two--and, opportunistic deleveraging, however modest, is a big plus for management, in my opinion. I hope to see more opportunistic actions from management.
You are correct that SA is running significant budget deficits because of plunge in oil prices.
However, SA also owns very substantial foreign reserves, ~ $750BB. So, it can endure pain longer than most other OPEC states--a couple years if it really wants to.
"Why LINE will never recover"
"That lost credibility might never be recaptured...."
Mindless pumping is stupid. Mindless pessimism is just as stupid.
Precious few saw the impending disaster in commodity prices, and precious few will correctly forecast the recovery. Those with certain knowledge don't spend their time on anonymous MBs. Fools like to dance on the slippery slope of fortune telling, nonetheless.
Far better to just maintain a watchful vigilance---and, humility.
How some folks take pride in public displays of insanity and character deficiencies is beyond me.
Discretion is the better part of valor.
Note: DCF = distributable cash flow
Depreciation is a non-cash charge that reduces earnings, but not cash flow. In calculating DCF, depreciation charges are actually ADDED back to earnings.