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Earthstone Energy, Inc. Message Board

true_truth 18 posts  |  Last Activity: May 19, 2016 6:44 PM Member since: Feb 13, 1999
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  • true_truth true_truth May 19, 2016 6:44 PM Flag

    Uncle Bobby, don't worry too much. I will have my whip and my lash out and be after Lodzinski if he doesn't get this horse out of the gate and on to the races now. On the call,
    It seems to me he was talking about even future acquisitions in the $100 million dollar
    range -maybe one or two if the lenders see it his way, but I think he has some chewing to do first. We need to make this merged company sit up and giddyup, before he starts
    anymore mating rituals down at the corral IMHO. Especially in this environment.
    I think he needs to look at his management team too. It seems a little bit top heavy for
    my tastes. Now is no time for Lodzinzki to sit on his laurels and talk about what he did
    5 years ago. This is a new ballgame, new and more challenging environment and he has
    to perform now. No more talk. Lets see the results or he may get sent back to the
    minor leagues for horse jockies.

    Sentiment: Strong Buy

  • true_truth true_truth May 19, 2016 11:46 AM Flag

    Bobby, you are coming off as sort of a bozo. You forgot to mention the $100 million plus in cash
    that came with the Oak Valley merger, and really when you look at the reserves that came in, the cash that came in, and the shares, it was all above board for share expansion in a proportional and commensurate
    manner. Otherwise, a year ago, the stock would have gone to one tenth of its former self.

    The merger is now over and complete, and final thru the court of British Colombia. The boed combined
    along with frac log is about 7000 boed. ESTE has another 220 drilling locations in the Permian
    Basin to go with the Eagleford inventory. Oil prices may back and fill, but are headed to a range of
    $50-60, and there will be growth here again, soon. You seem bent on shooting behind the clay pigeon
    and second guessing the future.

    Sentiment: Strong Buy

  • true_truth true_truth May 16, 2016 10:40 AM Flag

    Uncle Bobby, its not where its been, its not where it is right now, its where its going, just like in
    shotgun arts of trap shooting, you got to lead the clay pigeons. I would think a country bumpkin like
    you would know that? So, with oil prices rocketing up, almost 48 wti this morning, investors will
    begin discounting the future and will buy this stock before it actually shows its earnings potential.
    If you wait until the pigeon flies by to start aiming at it, you will never hit a thing but air.
    This pigeon is getting ready to fly, you better start aiming. Look at CLR, SN, LPI, and others,'
    they either have poor to no earnings too, and they are up 50-80%........so this pigeon is going to
    fly hard to catch up to the flock.

    Sentiment: Strong Buy

  • true_truth true_truth May 14, 2016 7:50 PM Flag

    Well, as I watched the PGA Players Championship, it dawned on me I did not account for USD to Canadian
    Dollar exchange rate in my calculation above--so the 201,932.5 invested was only $157,759.8 at 1.28 dollars
    to the Canadian dollar. So, the value paid for ESTE shares by these Lynden investors buying 524,500 shares was really only $10.59/share, so I can certainly see why they bought the heck out of Lynden all day long. Surprising it did not go higher into the .40's given oil pricing. So, I still think ESTE will go up as investors seem to have showed a demand for ESTE shares via the Lynden stock as a proxy, especially at these low values, where they are both trading. So, the arbitrage gap I was seeing before is not as wide as I first thought when I did the currency calculation. Looks like ESTE is maybe locked into around $11-11.25/share range until the Closing happens unless Lynden zooms up to $.50/share or more. Let's hope for a 1 million share day on Lynden or some dollar depreciation or both.

    Combined Company will still be in the neighborhood of 7000 boed.

    Sentiment: Strong Buy

  • Looks like Lynden Stock lvl.v traded 524,500 shares on Friday vs. average volume of 89,000 or so. Must be because the aquisition was approved. How much did these buyers pay for Lynden Shares when converted into Earthstone Stock? Well, if we forget about commissions and such, the average price for stock bought ranged between .37 and .40 cents/share, closing at .40 cents/share on Friday. Lets just call the average price for the day .385 for simplicity. That means the buyers of Lynden stock invested $201, 932.5
    into Earthstone stock by proxy. At a conversion rate of .02842 shares of ESTE for Lynden, I believe they bought 14,892.08 shares of ESTE on Friday by Proxy. Dividing what they paid, the $201,932.5 by these
    number of shares, looks like to me they paid $13.56/share for ESTE on Friday by buying Lynden Shares.
    If you use the closing price, its about $14/share. But ESTE closed at $11.24/share on Friday.
    All that is left now in order to close this acquisition is for the courts of British Columbia to approve the
    application submitted on Friday by Lynden. So, it would seem in a matter of weeks, this is actually
    likely to happen now. It seems to me that a .40 share price for Lynden is out of whack where
    ESTE is trading at $11.24, and the volume of shares bought at Lynden on Friday was pretty big.
    Maybe we will be seeing ESTE surge to meet the Lynden price or the Lynden price has to come way
    down to meet the ESTE price if the arbitrage is going to equalize. Will Lynden fall to $.32 per share
    or will ESTE go up to $14? Or will they meet somewhere in the middle?

    ESTE's Production this summer is going to rise fairly nicely.

    Lynden contribution 1329 Boed, Este contribution 3576 boed, ESTE upside 3000 boed on 30 day IP
    for 12 wells drilled but not completed or online yet.

    That totals at best around 7,905 boed, and maybe more averaged for longer IP rates around 7,000 boed.
    They may not complete them all at the same time but its all good upside.

    Sentiment: Strong Buy

  • true_truth true_truth Apr 21, 2016 5:00 PM Flag

    Arbitrage on a small stock like LVL.V with currency risk, taxation differences, and liquidity issues in both stocks, is really stretching it IMHO. Higher Oil Prices ought to serve to elevate both equities, with ESTE going up, and LVL.V going up on that ratio. Seems like LVL.V shareholders will be more
    interested in voting for the acquisition if ESTE stock is higher too. What if they vote not to be acquired? Good luck to those buying LVL.V. I'd rather own ESTE.

  • According to the last quarterly report, as of 12-31-2015, Earthstone had $23.26 million in cash on hand,
    and only $11.19 million in long term debt. The acquisition of Lynden is all stock, no cash. Earthstone due to its mergers replaced 180% of production in 2015 vs. 2014, and 4th quarter 2015 production was up 40% vs. 2014 at 3,873 bopd. It has 12 Eagleford wells drilled and likely they will be completed in the second half
    of 2016 per their last press release. The merger with Lynden should also close in May.
    So, with the upside drilling locations in the Eagleford, and in the Midland Basin, I believe this company will do well once we get to $50 oil which is not that far away, certainly by sometime in the second half or end of
    2016. Just my opinion. This one has not participated in the appreciation in the sector yet, so it is still
    a great buy.

    Sentiment: Strong Buy

  • Last year's annual report is now published and available.

    Sentiment: Buy

  • Lynden got approval via court approval to have their shareholder vote this last week. The SEC filing Earthstone made about the process, methodology, formulas, etc. is from what I can tell all about tax efficiency.
    It seems to me that perhaps no one realized how complex this deal would be from a tax efficiency basis until the tax attorneys got involved. Thats what I am reading in between the lines in this filing. So it has caused
    a little delay in working out all the tax efficient processes and structures before Lynden could do its shareholder vote. Volume the last week and a half has probably been around 150-200,000 shares. Maybe some insider had to sell due to its other obligations outside Earthstone, or maybe some hedge fund had to sell to cover its Valeant investment or something like that.

    My own opinion is we will be seeing $50/bbl by the end of the year. US production will likely fall below 9 million bopd in the next few weeks, and the decline is starting to bite. US rig count is at the lowest since the 1940's at only 362 rigs nationwide. Iran is not putting as much on the market as fast as forecasted, and
    after April, US gasoline demand will go up for the summer driving season. Granted, the Saudi's are talking out of both sides of their mouths but I think its so they can trade around whatever their position is week to week. I think we are on the inflection of prices going up in the next month or two again.

    Sentiment: Hold

  • If you look on SEC forms and filings for ENRJ you will see they filed for an extension to their 10K and earnings for 15 days. I also noted they checked the box NO for this following declaration:

    Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?

    So, it does not sound like they anticipate any significant change in operations or earnings.
    You may take your own interpretation of course.

    Truth

    Sentiment: Hold

  • Looks like Insiders own about 90.88% of this stock, and it has a rather small float, so with 28 days
    of short interest ratio, and oil going up, seems like there could be a spike of short covering.

    Sentiment: Strong Buy

  • I think if you listen to the conference call or look over the transcript, they have like 30 non-operated wells
    already drilled with around 2-3% Net interest in Bakken, and 12 wells already drilled in South Texas Eagleford which are in FRAC log or waiting on completions. It sounded to me like they would start to ramp up or spend money again when oil was around $45-50/bbl. So, this is a nice bit of upside in addition to the oil price itself, and the impact it will have on reserve additions rather than ceiling test write-downs.

    Now that all the news is out, and we are approaching the second quarter close on Lynden, this looks like
    a good buy as long as oil holds to the 30's. That we will see the next two weeks or so.

    Truth

    Sentiment: Strong Buy

  • Price Has begun to Move as well.......

  • Some Very Big Volumes Here, and Price has started to Go UP.

  • Yes, they will lose money, Yes, they will likely have a full cost ceiling write off of reserves, but so what?
    Everybody has already done all of those things, and their stocks are way up. Writing off reserves
    does not bother me in the least. It is a non-cash charge and has nothing to do with cash flow,
    and those reserves will likely just get added back down the road when prices are higher anyway.
    What if anything else is coming ?

  • After last months huge volume of 589,000, in two days we have a month's volume.
    Somethin goin on......Seems like someone is buying the company up, albeit at low prices

  • I downloaded the historical prices and volumes from the yahoo finance page for ENRJ and I found it was interesting that the volumes traded in Dec, Jan, and Feb were 360,100; 290,900; and 589,600
    respectively the last three months. Just anecdotally it seemed to me the volumes in February were getting
    bigger, and this proves it. Who is doing all the buying of the common stock and why I wonder?
    The Montecito guys might be suspect since they are on the record as doing some big buying. Seems to me
    no one would buy the common if they didn't think it would survive. Maybe there is a management led
    buyout coming with Montecito as supporting cast? But I imagine shareholders will be very angry if
    management has not done all the things it was supposed to do to keep the share price up and production
    up in the meantime. Fudiciary duties and such........But something other than low oil prices smells funny
    here. I sure hope management does not try to pull an Aubrey McClendon or a Tom Ward here, albeit on
    a much smaller scale. I also hope Montecito does not have some insider info that all the other common
    shareholders and preferred shareholders have not been made privy to.

  • The debt of Lynden is being refinanced as below--even before this transaction, ESTE confirmed
    its revolver had been re-affirmed by lenders at $80 million on December 3rd.

    Earthstone intends to refinance under its secured revolving credit facility all indebtedness of Lynden, consisting solely of US$37.2 million of borrowings under its revolving credit facility. As of September 30, 2015, the combined company would have had US$49.3 million in cash on hand and US$48.3 million drawn under a borrowing base of US$117.5 million. At closing, Earthstone anticipates that a new borrowing base will be established.

    The insiders in this company also own 90.88% of the common stock before this new transaction, and
    the new shareholders would also be owning ESTE shares. So, its mostly insider held as well.

    As for a Hockey Stick recovery---These small equities are gonna start moving a long time before the inventory draws actually bring the market into equilibrium.......They will in fact forecast when that equilibrium will occur
    by something like 4-6 months ahead.

    Truth

    Sentiment: Buy

ESTE
14.84+1.26(+9.28%)May 24 4:02 PMEDT