gary17 Posted September 17, 2019 Share Posted September 17, 2019 They will renegotiate a deal with Iran - Trump is here to make peace. Can someone give him a Nobel already. Link to comment Share on other sites More sharing options...
Spekulatius Posted September 18, 2019 Share Posted September 18, 2019 Come back in two months .... Do you really think there will NOT be a strike on Iran, aimed at removing both the leadership and the processing facilities? And do you really think that Iran will NOT strike in kind? 'Cause while everybody is bombing Tehran .. a couple more missiles quietly slip over the KSA border. And this time, they finish the job. The WTI supply and war premiums are not going away. And they are interchangeable. SD I think Trump is far less likely to start a war than most presidents before him. I don’t think there is going to be strike on Iran, at least not on Tehran. Perhaps a surgical strike on some military assets, but nothing like a war. Perhaps the Saudis are going to do something , but most likely, they will just buy a Patriot system to defend against these threats and we would be happy to deliver, I think. The US is self supplied with crude (net) , so this is somebody else’s problem. Let them figure it out. Link to comment Share on other sites More sharing options...
Liberty Posted September 18, 2019 Share Posted September 18, 2019 Come back in two months .... Do you really think there will NOT be a strike on Iran, aimed at removing both the leadership and the processing facilities? And do you really think that Iran will NOT strike in kind? 'Cause while everybody is bombing Tehran .. a couple more missiles quietly slip over the KSA border. And this time, they finish the job. The WTI supply and war premiums are not going away. And they are interchangeable. SD I don't know the future. It could happen, or it could not. https://www.cnbc.com/2019/09/18/oil-markets-saudi-arabia-oil-production-in-focus.html Anyone who claims to know the future is full of it. If they knew the future, they wouldn't have bought Penn West/OBE... Link to comment Share on other sites More sharing options...
SharperDingaan Posted September 18, 2019 Share Posted September 18, 2019 The reality is that OBE assets will be valued against a forward price deck that includes something for today's volatility; and in today's environment, using a pre-attack comp is not going to get you the winning bid. The discussions will occur behind closed doors, and the winning bids still might not be enough. Shareholders will know, as/when OBE issues a material press release. Purgatory for some. Agreed, nobody knows how this SA/Iran 'thing' will eventually turn out. All we can do, is seperate the propaganda from the actual as best we can. And 'sniff test' what seems realistic, against what we know of the region. That said, few would dispute that the regional risk today is a lot higher than it was last week; and that today's and future crude prices will ultimately reflect it. OBE's history of value destruction is well documented, so hardly surprising the market is giving zero credit to OBE's literally perfect 'timing' this time around. Depression prevails; few can see beyond their cost bases, or the opportunity. Their loss. SD Link to comment Share on other sites More sharing options...
Joe689 Posted September 26, 2019 Share Posted September 26, 2019 I am not sure anyone will value assets on anything other than the current strip. More intangibles are the decommissioning liabilities and 1B+ in tax pools. I think it needs to get done sooner than later. The more the stock drops, the harder it gets to transaction for both sides of the transaction, as the spread will widen Link to comment Share on other sites More sharing options...
Liberty Posted October 7, 2019 Share Posted October 7, 2019 Down another 25% in the past month. $53m USD market cap. Good thing oil prices were pretty flat during that time, I'm not sure the equity stub would do well on lower commodity prices.. Link to comment Share on other sites More sharing options...
Joe689 Posted October 7, 2019 Share Posted October 7, 2019 Almost like restructuring is inevitable now. At least the market is saying that. But the financials do not show any issues with making any debt payments. In fact, they are lowering debt. And bank just renewed revolver so who knows. The strategic alternatives is almost a month old now. Nothing yet. At a loss here on how to assign value, all the metrics show deep value, market is saying "junk". Volume still low... Link to comment Share on other sites More sharing options...
SharperDingaan Posted October 7, 2019 Share Posted October 7, 2019 Isn't that really telling you that the market doesn't have a clue? Yet the bank is lending them new money for drilling, they are consistently drilling within their FFO (reconfirmed 120M for 2019), they are routinely tying in net new higher net-back and above-curve production, they have around 25% of production hedged at roughly USD 60/boe, they have head-count and legal savings kicking in, and they are systematically paying down debt (both removing covenants & lowering cost). Evidence, not speculation. SD Link to comment Share on other sites More sharing options...
Liberty Posted October 8, 2019 Share Posted October 8, 2019 Isn't that really telling you that the market doesn't have a clue? Yet the bank is lending them new money for drilling, they are consistently drilling within their FFO (reconfirmed 120M for 2019), they are routinely tying in net new higher net-back and above-curve production, they have around 25% of production hedged at roughly USD 60/boe, they have head-count and legal savings kicking in, and they are systematically paying down debt (both removing covenants & lowering cost). Evidence, not speculation. SD What does any of that prove? They were doing that 5 years ago too and it didn't stop them from losing 98% of their value since.. It's a hostage situation with the lenders. They don't want to throw bad money after good, but they also don't want to turn off the spigot because payment on their existing debt requires continuing operations (and maybe if they're lucky, a turnaround). So they kick the can down the road, but I don't think this "evidence" is particularly strong in favor of the market being wrong. Link to comment Share on other sites More sharing options...
SharperDingaan Posted October 8, 2019 Share Posted October 8, 2019 Isn't that really telling you that the market doesn't have a clue? Yet the bank is lending them new money for drilling, they are consistently drilling within their FFO (reconfirmed 120M for 2019), they are routinely tying in net new higher net-back and above-curve production, they have around 25% of production hedged at roughly USD 60/boe, they have head-count and legal savings kicking in, and they are systematically paying down debt (both removing covenants & lowering cost). Evidence, not speculation. SD What does any of that prove? They were doing that 5 years ago too and it didn't stop them from losing 98% of their value since.. It's a hostage situation with the lenders. They don't want to throw bad money after good, but they also don't want to turn off the spigot because payment on their existing debt requires continuing operations (and maybe if they're lucky, a turnaround). So they kick the can down the road, but I don't think this "evidence" is particularly strong in favor of the market being wrong. Tells me that the market has been consistently wrong for 5 years straight, and that being clueless is not something new :) SD Link to comment Share on other sites More sharing options...
Liberty Posted October 8, 2019 Share Posted October 8, 2019 Tells me that the market has been consistently wrong for 5 years straight, and that being clueless is not something new :) SD Good luck. I'm sure the market will soon provide a 50-bagger to get back to even for those people who were "right" 5 years ago... Link to comment Share on other sites More sharing options...
roundball100 Posted October 8, 2019 Share Posted October 8, 2019 Tells me that the market has been consistently wrong for 5 years straight, and that being clueless is not something new :) SD Good luck. I'm sure the market will soon provide a 50-bagger to get back to even for those people who were "right" 5 years ago... Liberty - if I understand previous responses correctly, we just have to keep flipping a coin, and hope that we now get about 20 or 30 coin-flips in a row going our way, to balance out the 30 that have gone against us. (I have enjoyed following this discussion ... thanks for keeping others honest) Link to comment Share on other sites More sharing options...
SharperDingaan Posted October 8, 2019 Share Posted October 8, 2019 Tells me that the market has been consistently wrong for 5 years straight, and that being clueless is not something new :) SD Good luck. I'm sure the market will soon provide a 50-bagger to get back to even for those people who were "right" 5 years ago... Liberty - if I understand previous responses correctly, we just have to keep flipping a coin, and hope that we now get about 20 or 30 coin-flips in a row going our way, to balance out the 30 that have gone against us. (I have enjoyed following this discussion ... thanks for keeping others honest) Did you not learn anything from WEB ;) You only need ONE flip to go your way - when the selling Mr Market is manic depressive. So ... sell baby, sell! SD Link to comment Share on other sites More sharing options...
Liberty Posted October 8, 2019 Share Posted October 8, 2019 Did you not learn anything from WEB ;) You only need ONE flip to go your way - when the selling Mr Market is manic depressive. So ... sell baby, sell! SD I don't think that's what Buffett is teaching... And I can't sell this because I've never owned it. Link to comment Share on other sites More sharing options...
Joe689 Posted October 8, 2019 Share Posted October 8, 2019 The word on the streets is that all banks are trimming loans. With OBE almost maxed out, that could explain the action and strategic alternatives. Banks gave them a heads up. Line is reaffirmed in November. Link to comment Share on other sites More sharing options...
Spekulatius Posted October 9, 2019 Share Posted October 9, 2019 The word on the streets is that all banks are trimming loans. With OBE almost maxed out, that could explain the action and strategic alternatives. Banks gave them a heads up. Line is reaffirmed in November. The sector will become a great field for distressed debt and bankruptcy investing. We had a already a mini credit market freeze for E&P and related industries in late 2015 and ai think we are going a more severe version of this coming back. Link to comment Share on other sites More sharing options...
SharperDingaan Posted October 11, 2019 Share Posted October 11, 2019 Just a disclosure that we added again at recent prices. Beyond stunning that we were able to acquire significant quantity at such a steep discount to value. .... and without having to use the option market. SD Link to comment Share on other sites More sharing options...
Liberty Posted October 11, 2019 Share Posted October 11, 2019 Just a disclosure that we added again at recent prices. Beyond stunning that we were able to acquire significant quantity at such a steep discount to value. .... and without having to use the option market. SD Stunning indeed! Link to comment Share on other sites More sharing options...
Joe689 Posted October 22, 2019 Share Posted October 22, 2019 CFO resigned. Link to comment Share on other sites More sharing options...
Liberty Posted October 22, 2019 Share Posted October 22, 2019 CFO resigned. Link to comment Share on other sites More sharing options...
Joe689 Posted October 22, 2019 Share Posted October 22, 2019 Generally. But market is not reading it that way....*yet. The posture and events of this company shout it is already good as sold... imo Link to comment Share on other sites More sharing options...
SharperDingaan Posted October 22, 2019 Share Posted October 22, 2019 Agreed, but a sale/merger still has to offer 'highest and best value', and still has to pass the legal 'due diligence' requirements of the OBE board. There is nothing wrong with a sale under these conditions; it's really just a question of the cash/paper consideration, and whether the buyer can accrete enough stock to force a mandatory tender. Hopefully, we read an announced proposal in the next little while. SD Link to comment Share on other sites More sharing options...
Joe689 Posted October 22, 2019 Share Posted October 22, 2019 Will help to have TPH on board. They will be offering the opinion. Valuations are not so cut and dried do to oil volatility, and long term oil outlooks. Not to mention, egress risks. My guess is that TPH would bless quite a few combinations, but in the end, it will have to go to vote.... Got consider our three largest holders. Kernwood (> 7 cost basis), FF (>7 cost basis), and our new 8% Chinese friend (unknown basis). Most objective funds understand the concept of mark to market. A lot of plays out there just like this one. In theory, take cash, and redeploy to capture the other majority of the upside that the macro market created. Link to comment Share on other sites More sharing options...
Liberty Posted October 22, 2019 Share Posted October 22, 2019 Seems unlikely the CFO would resign if there was a great deal anywhere near on the horizon. Link to comment Share on other sites More sharing options...
Spekulatius Posted October 22, 2019 Share Posted October 22, 2019 Seems unlikely the CFO would resign if there was a great deal anywhere near on the horizon. It’s always worrisome, if the guy running the numbers decides it’s not worth it. Link to comment Share on other sites More sharing options...
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