tag:blogger.com,1999:blog-1527840491496268397.post1504298761343897544..comments2024-03-08T11:20:30.095-07:00Comments on Credit Bubble Stocks: Goodrich Petroleum President & COO Robert Turnham at EnerCom Oil & Gas Conference 2014Unknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-1527840491496268397.post-89940835807454086892015-02-16T13:11:28.267-07:002015-02-16T13:11:28.267-07:00Mgmt likely views the hedges as 2-3 quarters of ru...Mgmt likely views the hedges as 2-3 quarters of runway. The key signal to watch is when GDP suspends dividends on any of the preferred shares. That will indicate if mgmt thinks a JV partner can be found to develop TMS, or if they realize the company is reaching a dead end.<br /><br />Are you long the 2019 notes and short the common, CP?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-44264929045423512862015-02-16T12:21:46.697-07:002015-02-16T12:21:46.697-07:00I think they should:
* cash in their hedges
* pay ...I think they should:<br />* cash in their hedges<br />* pay off the senior loan<br />* do an exchange offer to reduce the 2019 debtCPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-17186228760387643172015-02-15T13:55:12.903-07:002015-02-15T13:55:12.903-07:00"figuring out the best way to access [new] ca..."figuring out the best way to access [new] capital"<br /><br />NOT<br /><br />"figuring out the best way to compound existing shareholders' capital"CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-73549968870850615272015-02-15T13:54:31.397-07:002015-02-15T13:54:31.397-07:00Their balance sheet shows retained earnings of neg...Their balance sheet shows retained earnings of negative $860 million.<br /><br />They've been in business 20 years. At the high end, if they had produced their current rate of oil production (~1mm bbl/y), they've produced 20 million barrels.<br /><br />That's a loss of $43 per barrel - a subsidy by their investors to consumers.<br /><br />And that estimate of cumulative production is probably very high.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-78431757372959797122015-02-15T13:49:47.752-07:002015-02-15T13:49:47.752-07:00You can tell the company has excellent operators b...You can tell the company has excellent operators but no strategic focus.<br /><br />GDP "strengths are acquiring acreges and then... figuring out the best way to access capital."<br /><br />In other words, spending massive CAPEX with zero concern for ROE, as management has been doing while accumulating loses year after year.<br /><br />According to the prior GDP annual reports, one of the most severe risks to the company is a reduction in the price of oil.<br /><br />Lower oil prices will likely trigger one or more of the three covenants on the Senior Credit Facility, pertaining to the following three financial ratios:<br />1) the Current Ratio,<br />2) EBITDAX to Cash Interest Expense, and<br />3) Total Debt to EBITDAX.<br /><br />It also seems rather obvious that the company will not have sufficient liquidity to continue operations throughout 2015, as the borrowing base on the Senior Credit Facility will get redetermined -- and further reduced -- on the first of April.Anonymousnoreply@blogger.com