Joe689 Posted December 30, 2019 Share Posted December 30, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Link to comment Share on other sites More sharing options...
muscleman Posted December 30, 2019 Share Posted December 30, 2019 Just some thoughts.... Opinions differ, but I think we comfortably cross the USD 1.00/share threshold fairly soon. Thereafter a fairly quick run to USD 2.00/share, once institutions become comfortable there isn't going to be a future NYSE delisting, or a loan call. The reality is that any new kind of demand in quantity ... and this thing will quickly rise. How's your forecasting track record so far in this thread? Spot on... With that said, I am turning from very bearish to very bullish on Oil and other commodities so I’ll be actively hunting in this space now. OBE stock is essentially an equity stub. Maybe SD will be finally right this time. Link to comment Share on other sites More sharing options...
Gregmal Posted December 30, 2019 Share Posted December 30, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out. Link to comment Share on other sites More sharing options...
enoch01 Posted December 30, 2019 Share Posted December 30, 2019 Just some thoughts.... Opinions differ, but I think we comfortably cross the USD 1.00/share threshold fairly soon. Thereafter a fairly quick run to USD 2.00/share, once institutions become comfortable there isn't going to be a future NYSE delisting, or a loan call. The reality is that any new kind of demand in quantity ... and this thing will quickly rise. How's your forecasting track record so far in this thread? SD, what other names do you like? Link to comment Share on other sites More sharing options...
heth247 Posted December 30, 2019 Share Posted December 30, 2019 This name is quite the enigma. They are on their second "interim" CEO, who happens to have very little O&G operational experience, a hedge fund manager. They also happen to be in a strategic alternatives. The chair has stated, "As we move into the later stages of our previously announced strategic alternatives process, the Board will continue to leverage our various strengths. Having Stephen step into the Interim President and CEO role at this time will enable the Company to take advantage of his vast experience in corporate transactions and capital markets to guide us through the next period of this process." Then I look at the TPH marketing package, and I see "The Obsidian Board of Directors has a preference for a corporate merger transaction, but cash asset sales will be considered to the extent that they offer compelling value;" Now I see oil at near yearly highs. The float has turned over significantly down here. And mere 2% buy in the past couple weeks brought the stock up near 100%. I feel like very few shares are left to trade so they continue to shake the tree. I think this thing transacts. TPH confirmed the proposals have been received. The word is that interim CEO, a major shareholder, hedge fund manager is commuting to Calgary. They should be at the point of picking a value maximizing option. Heck, I think they could hedge for a year out at these prices and in return get refinanced no problem. Joe, when you said "TPH confirmed the proposals have been received.", did you mean that they have received offers? Link to comment Share on other sites More sharing options...
SharperDingaan Posted December 30, 2019 Share Posted December 30, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Despite repeated managements best efforts over the last few years, they haven't managed to BK the company. There's no real reason to think they might be successful this time around, when business conditions are a lot better than they used to be. There are lots of very good operational people available, long distance commuting is not a sustainable thing, and any significant asset sale still has to be approved by the BOD. SD Link to comment Share on other sites More sharing options...
Liberty Posted December 31, 2019 Share Posted December 31, 2019 Despite repeated managements best efforts over the last few years, they haven't managed to BK the company. There's no real reason to think they might be successful this time around The equity has melted 99.5% since 2012. Bankruptcy isn't the *only* bad thing that can happen... Link to comment Share on other sites More sharing options...
FFHWatcher Posted December 31, 2019 Share Posted December 31, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out. Everyone else is just going to let this comment go? "Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read. I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows. Link to comment Share on other sites More sharing options...
Gregmal Posted December 31, 2019 Share Posted December 31, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out. Everyone else is just going to let this comment go? "Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read. I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows. With certain setups, particularly heavily indebted companies with new CEOs/management teams, its a no brainer. Look at SD, EXXI, BTU just to name a few. Use common sense. You're "the guy". Comp is heavily issued in shares. Shares have a noose around their necks called debt. Your earnings, are crippled by interest expenses. You know theres a substantial chance that even if you do your job well, it won't matter. VS Restructure the debt, get issued new equity(sometimes as much as 10% of the newCo) and now have a clean balance sheet to work with(which also gives you the ability to enhance your "company" with acquisitions or financial gimmicks). Link to comment Share on other sites More sharing options...
Spekulatius Posted December 31, 2019 Share Posted December 31, 2019 While competent management is always nice, they just have to not BK the company. There lies a problem with me. You have a CEO now that is a non-O&G operator. Not sure you want him sticking around for six months.. Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out. Everyone else is just going to let this comment go? "Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read. I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows. “Almost always “ seems like a hyperbole, but it is true that bankruptcy is a negotiated process. If a debt holder for example wants a company to go into bankruptcy, they can negotiate a package with management and give them enough stock in Newco to align their incentives and get it done often enough. In any case, I would not expect management to fight for common shareholders too hard, when management can build their own escape hatch and screw the common shareholders and regular employees instead. Link to comment Share on other sites More sharing options...
Joe689 Posted February 7, 2020 Share Posted February 7, 2020 Reserves were solid. Lower price deck, new ARO disclosure inclusions, and yet NAV almost stays the same because of the WG oil reserve increases. Liquids content up. Decline still very low. Look at that F&D too. Tough to beat. Reflects the manufacturing style and quality of WG rock Link to comment Share on other sites More sharing options...
heth247 Posted February 8, 2020 Share Posted February 8, 2020 Reserves were solid. Lower price deck, new ARO disclosure inclusions, and yet NAV almost stays the same because of the WG oil reserve increases. Liquids content up. Decline still very low. Look at that F&D too. Tough to beat. Reflects the manufacturing style and quality of WG rock We are holding up pretty well compared to other Canadian oil names. But given the Coronavirus, I suspect that there are still rough days ahead. Looking forward to hearing what their debt reduction plan is for 2020. Link to comment Share on other sites More sharing options...
Joe689 Posted February 10, 2020 Share Posted February 10, 2020 Their PR a few weeks ago suggested that they were able to lower debt a bit in Q4. Next catalyst event is the Feb 28th bank line redetermination. Do the banks turn their banks on them? Link to comment Share on other sites More sharing options...
Joe689 Posted February 20, 2020 Share Posted February 20, 2020 Calling special situations peeps: 80%+ of the capital structure in on the wire for Feb 28th revolver redetermination. Link to comment Share on other sites More sharing options...
Joe689 Posted February 28, 2020 Share Posted February 28, 2020 Crazy stuff here. First sounds like were screwed https://finance.yahoo.com/news/obsidian-energy-announces-extension-updates-214700550.html then https://www.morguard.com/news-knowledge/news-article?newsId=123211 Link to comment Share on other sites More sharing options...
heth247 Posted February 28, 2020 Share Posted February 28, 2020 Crazy stuff here. First sounds like were screwed https://finance.yahoo.com/news/obsidian-energy-announces-extension-updates-214700550.html then https://www.morguard.com/news-knowledge/news-article?newsId=123211 Looks like we are gonna save $7M a year in rent. Hopefully the note holders will also cooperate and extend the maturity by one year. Question is how much interest or fee are they going to charge. Link to comment Share on other sites More sharing options...
Joe689 Posted February 28, 2020 Share Posted February 28, 2020 Actually, we were on the hook for 33M per year for 5 more years. We have 11M income worth of subleases. If the agreement takes place, the REIT takes those subleases over too. Those subleases are a liability, and would matter in a merger case. Saving 7M a year is an understatement. Hope it gets done. Link to comment Share on other sites More sharing options...
heth247 Posted February 28, 2020 Share Posted February 28, 2020 Actually, we were on the hook for 33M per year for 5 more years. We have 11M income worth of subleases. If the agreement takes place, the REIT takes those subleases over too. Those subleases are a liability, and would matter in a merger case. Saving 7M a year is an understatement. Hope it gets done. Joe, where did you get the 11M income for subeases? I see from the most recent quarterly report that we have total office lease liability of $177M ($8M for 2019, $33M each for 2020-2023, $37 for 2024+). Then the footnote says sublease recoveries of $83M, that seems to average out more than $11M a year. My math is, our office lease liability (net of sublease) is $177-8-83=86M for five years of 2020-2024, that average out to be 86/5=$17.2M a year for rent. Assume they renegotiate it to $10M a year, then that is about $7M savings a year. Link to comment Share on other sites More sharing options...
Joe689 Posted February 28, 2020 Share Posted February 28, 2020 My math was (177-83) / 5. Unsure how to handle 2019 in terms of the math. Is the sublease subtraction inclusive to 2019 or just going forward? That represents your (8). My point about saving 7m a year being an understatement, is more about the indemnification of the subleases, which takes a huge amount of possible liability off our backs. Perfect example being in 2017 and OBE was on the hook for $13 million in losses when one of their lessees went belly up. Link to comment Share on other sites More sharing options...
heth247 Posted February 28, 2020 Share Posted February 28, 2020 My math was (177-83) / 5. Unsure how to handle 2019 in terms of the math. Is the sublease subtraction inclusive to 2019 or just going forward? That represents your (8). My point about saving 7m a year being an understatement, is more about the indemnification of the subleases, which takes a huge amount of possible liability off our backs. Perfect example being in 2017 and OBE was on the hook for $13 million in losses when one of their lessees went belly up. I see, thanks. Hope they get this done and we will survive to fight for another year... Sigh.... Link to comment Share on other sites More sharing options...
Joe689 Posted February 28, 2020 Share Posted February 28, 2020 Just sell the thing at this point. Banks do not want to partner with us anymore. It is clear. And you cannot replace them with anyone else....sooo Link to comment Share on other sites More sharing options...
SharperDingaan Posted February 28, 2020 Share Posted February 28, 2020 Negotiate a lease solution, and extend the due dates on the term loans by Wednesday next week - or you're cut off. However, execute successfully, and you've lower cash costs and an immediate 50M of additional borrow capacity. And all just before the Q4 2019 report is due. We have a market for a reason. SD Link to comment Share on other sites More sharing options...
bizaro86 Posted February 29, 2020 Share Posted February 29, 2020 I wonder if Rai Sahi has ever wanted to own an oil company? High stakes negotiation for sure... Link to comment Share on other sites More sharing options...
Joe689 Posted February 29, 2020 Share Posted February 29, 2020 Was wondering too if he will get some equity. Is that what you are referring to? The company could file BK in a few weeks because of notes due. Then lease will be worth zip. You might even see an extension of lease (at still above market) to give him something extra. Havent seen this situation play out before Link to comment Share on other sites More sharing options...
bizaro86 Posted February 29, 2020 Share Posted February 29, 2020 Was wondering too if he will get some equity. Is that what you are referring to? The company could file BK in a few weeks because of notes due. Then lease will be worth zip. You might even see an extension of lease (at still above market) to give him something extra. Havent seen this situation play out before Yeah, I would assume they get some equity in exchange for an amendment. They can't give them cash. They would be a very large creditor in a CCAA proceedings, so could end up in control that way as well. Although that would almost certainly require cash in from somebody. I suspect morguard prefers them in the building paying above market rates to getting the leases rejected in bankruptcy. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now