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công ty Earthstone Energy Message Board

true_truth 11 posts  |  Last Activity: Jun 24, 2015 12:54 PM Member since: Feb 13, 1999
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  • The registration is dated 1 Jun, 2015, and follows two insider form 4 stock sales by Lance Helfort and Atticus Lowe of 33,990 preferred shares each that each one sold in late May.

    We are registering the resale from time to time by the selling stockholders identified in this prospectus or a supplement hereto of up to 3,685,155 shares of our common stock and up to 112,658 shares of our Series A Cumulative Redeemable Perpetual Preferred Stock that are currently held by certain of the selling stockholders.

    Notice it says all of these shares are currently held by the selling shareholders identified in the document as of this date, June 1, 2015.

    The selling stock holders list is extensive and runs from page 45-58 of the filed document. Go see for yourselves.

    This prospectus is part of a registration statement that we filed with the SEC utilizing a shelf registration or continuous offering process. Under the shelf registration process, the selling stockholders named in a prospectus supplement may, from time to time, sell up to 3,685,155 shares of common stock and up to 112,658 shares of Series A preferred stock in one or more offerings as described in this prospectus.

    If I've missed something please point it out in filed documents. But this does not seem to corroborate
    the story that this is just a retro filing for something that already happened.

    I also doubt that this could happen with all of this documentation getting filed first not after.

    Give some proof not just the assurance that everything is hunky dory and normal.


    Sentiment: Hold

  • true_truth true_truth Jun 23, 2015 9:58 PM Flag

    In the March 11 filing from Enerjex on its own private placement from which it got the proceeds of stock issued, there is no mention of a secondary private placement for other investors selling their own shares? If what you say is the case, please point me to anywhere this has ever been disclosed or discussed. The March 11, filing from the company seems to be only about its own private placement. This latest filing from June states the 3.5 million shares for these shareholders will be sold from time to time, not to the accredited investor mentioned in the March 11th filing. I'd like to make sure we get the facts and to the bottom of this. Truth

    Sentiment: Hold

  • If you will bother to check the SEC filings lately, several of the board, and some large insiders and hedge funds decided to register 1/3 or so of the outstanding shares for sale to their own accounts. So this is big shareholders selling their own existing stock, its not dilutive, and the proceeds do not go to the company but to these specific shareholders, which are all listed in the documentation. It is a rather extensive list. It seems to me like West Coast Mgmt., and a lot of their director nominees and affiliates are all selling.
    Its about 3.5 million common shares and 112,000 shares of the preferred. I don't know whether
    they are having an internal fight over control of the company or about investment strategy and direction or
    they are just scared of low lingering oil prices in the low 60's which seem to have set in for awhile.
    I have a few shares here, and when I decided to invest, I used a number for common shares of about 15 million shares in my NAV calculation even though there are only about 8-9 outstanding now, because I
    thought eventually all of the preferred will be converted. If you look at the book value and divide by 15 million shares, the value is still above $2/share, so unless we have a tremendous amount of future write downs of more reserves, I think these shares are way undervalued. I sort of thought with the last two quarters of writedowns maybe we had stabilized some. Looks to me like they deliberately used last quarter as a trash bin to dump everything down they could to get things to a good base going forward. I also do not think these registered sellers will not dump all 3.5 million shares at these low prices. I think they thought they would be selling more like $1.70 or so when they filed. So, they may actually have second thoughts and buy instead of sell now. Its hard to tell who's on first here though a little bit.

    Sentiment: Hold

  • I see the new book value is about 22.79/share. The 10 Q for Q1 2015 shows their cash is down to $59 million from $100 million at Dec. 31, 2014.

    Where did they spend all that cash this last quarter? Don't know where all of it went, but they bought their own drilling rig in December 2014. Can you believe that? We have 600-700 rigs stacked, and they spent
    a butt load of money on a new rig that is being built???? Does anyone get this?

    Loss for Q1 was 8 cents/share. Not sure where this goes from here.

  • I did not think this quarter was very good. They missed revenue by quite a lot even with higher production than forecast. Their pricing even with hedges was in the dirt. What happened to the hedges? Doesn't seem they were all that effective after the cost for hedging. Net derivatives gain was only $63 million, even with the extremely low pricing environment Q1 presented. Natural Gas Pricing was ugly at $2.14. We of course know oil prices were tanked, but LPI's net price was only a little over $41.00/bbl. The other place that they missed on revenue was in midstream. Midstream rev was down from Q4 2014 even though supposedly the pipelines are now more fully operational??? The income taxes should not have been much over a million dollars this quarter, but they had some abnormal accounting adjustment in extra income tax due to some issues with past stock based compensation that totaled about an incremental 2.5 million. Maybe all this was deferred, but it did not help the report for calculated net income.

    This Q1 got calculated on weighted avg. shares of about 165,000,000 but the new share count for future
    quarters fully diluted is 213,000,000. So this looks like an uphill slog give their report here. Not
    to happy with this. Does anyone think these guys are too complacent? The best hope I could see
    but which does not look likely is sale of the company, but the management seems pretty negative on that
    for the near and intermediate future. What is there to smile about here?


    Sentiment: Sell

  • Reply to

    Question for the Board on Different Idea

    by true_truth May 1, 2015 5:20 PM
    true_truth true_truth May 2, 2015 1:05 PM Flag

    Real, Thank you for your taking a look at this, and your reply. I assume you saw they already
    revised their PV-10 down from 100 million to 64 million at the request of their lender to
    reflect the impact of lower oil prices. So, I don't know if they wrote reserves down yet, but
    essentially, I think the bank wanted their collateral and leverage allowed under the loan to reflect the new pricing environment. So, if their book value is about $46 mm and their new revised PV10 is 64 million, maybe the hit has already largely been realized?

  • Anyone ever heard of ENRJ, small producer in San Antonio? I would appreciate an honest idea whether anyone thinks this is a decent small bet or option like position opportunity? I've done some due diligence on them and they are 1) hedged pretty far out, 2) have already gone through equity and preffered equity issuance to satisfy their lender on recapitalizing their debt, 3) Already revised their SMOG reserves/PV10 downward substantially to satisfy lenders. They are pretty beaten up at this point. They have several disadvantages I can see--not well known, unrecognized (sound familiar?), they may not grow as fast now, they are somewhat illiquid, and not an opportunity to back the truck up as much as make some good small bets.

    What say you? Is there some financial risk still lurking or some reason I would not want to take a small

    Would appreciate and honest answer and thank you in advance for your opinion.


  • I have done some due diligence on ENRJ, a small producer out of San Antonio. They seem interesting to me because 1) they are hedged, 2) they are beaten down price wise, 3) they had some problems with their lender, revised their SMOG reserves downward, and did several common stock and preferred stock offers to
    refinance, and recapitalize to suit their lenders and the lower SMOG PV10. So they have been through the hamburger shredder a bit, and maybe have some potential. I have made some calculations including all of the new stock, new levels of debt, and preferred stock, and came up with a Net Asset Value far in excess of where they are now trading. The downsides I can see are slower growth, the lack of depth in liquidity the way the stock trades, it is not very well known and under recognized, and it may still have some financial risks I am not aware of even though it is fully hedged.

    Anybody else have an opinion on taking a small option like position on this one? I think it is too illiquid to back up the truck, but it may be excellent for some small bets?

    Replies appreciated in advance.


  • If LPI or Warburg had the view of a Saudi Market Share World, with a downward sloping crude oil price forecast --not too dissimilar to the NA natural gas markets the last few years...... then maybe someone would
    get a little more serious about monetizing the resource base now. They need to start somewhere, and
    I do think it will be a series or phases of small deals, though if Exxon got interested they could just buy it all.
    Really, the company valuation based on 297 mmboe is just the tail of the dog. The dog is 4.5 billion barrels,
    but it will take $40-60 Billion dollars of capital investment to ever monetize all of those barrels of oil. What is LPI's level of investment this year? $475 million. What was it last year? Even at last year's pace, and $100 oil these resources would not add any value to LPI's shareholders anytime soon without some creative deal work. Dont let the perfect kill the good and don't model the last ounce of return out of the deal for the counterparties. Put yourself in their shoes and think about what kind of a deal can get done that accomplishes
    some near term shareholder value. Otherwise, we may all be dead on the current monetization schedule.
    Are shareholders better off with some present value that got 80-85% of perceived value now or
    100% of perceived value 10 years from now? If you believe oil is going back to $100 in two years
    fine. I'm not one who believes that as a base case, but if we had strong global economic recovery and or
    disruptive war, I suppose it could happen again. My vote is to get more serious about monetizing the whole
    dog sooner. Where is Warburg?

  • That press release was a little disappointing to some I guess. Doesn't seem like they are anywhere close to doing anything but talking about deals. The counterparties are looking for distressed assets, and a little upside, and LPI is looking to sell assetson very tough terms--(my perception). All the data that LPI has would normally seem like a boon to any buyer but LPI may be using that same data to model the other guys to a 0 percent return. Then it would be a "good" deal. The conundrum is that LPI had at least a 40 year drilling inventory when at $100 oil. At $50 oil with one rig running, and all the other rigs in the industry stacked, that may as well be a 1,000 year inventory now. No one is going to leap at the chance to unstack 20 rigs right this second and start drilling. If that was the case, LPI would do it themselves. I don't see anything happening deal wise until the storage overhang is well worked off, and the Iranian overhang is made more clear, and the industry as a whole can really envision unstacking rigs. Then maybe someone can see a deal because any deal has to involve drilling, and buying acreage to drill before you can actually envision drilling is hard to do, especially if LPI wants a mint for the raw material. These are not distressed assets. That was what the stock issuance and hedging were about. But, when someone is "buying" an opportunity to go spend a lot of their own money, they will want either a little perceived upside or absolute certainty or as much of both as they can get. WIth as much of an unmonetized drilling inventory as LPI has, I believe they need to understand that the perfect should not kill the good. They may never get a perfect deal. Given the size of their job, 4.5 billion barrels of resource compared to 297 mmboe of proved reserves, they need to start converting some of that to shareholder value. (continued)

  • Reply to

    Surprisin' Strength

    by unclebobbyrednecker Apr 14, 2015 10:50 AM
    true_truth true_truth Apr 14, 2015 1:02 PM Flag

    I don't get it either. They had a huge 4th quarter loss. Oil prices in Q1 were much worse, which means
    very likely another huge loss in Q1 2015, and all they have going for them is $100 mm in the bank drawing interest. Did they lend that money out to loan sharks at 20% interest or something in Q1? Its just sitting there doing nothing. Even if they did find a deal to make to acquire "distressed assets", the issue is the risk of investing that money and what value can they create with it? That capital is looking for a place to buy some risk
    that may eventually create a reward, but right now, there don't seem to be a lot of despados selling at 10 cents on the barrel. More like: "we issued a lot of new equity, we hedged ourselves, and we don't need to sell nothing right now". Lets see if Saudi's keep this up, and why don't you come back next year? So, that $100 million may sit there awhile while oil prices go back up. Meantime their core operations are unprofitable at any price below WTI of about 55-60/BBL. IMHO, and their Bakken is sucking eggs way below WTI pricing. I just am not hearing about a lot of transactions actually getting done. Lots of people say stuff is for sale, and lots of people evaluating assets, but no deals being done. Lots of dancing, but no marriages,
    pecks on the cheek, shake hands at the door, and that's about it. Maybe somebody has some inside info,
    otherwise, this is gonna come back down hard.

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