LONE LoneStar has dropped below $2??

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dig4value
Posts: 20
Joined: Tue Apr 30, 2013 1:50 pm

LONE LoneStar has dropped below $2??

Post by dig4value »

LONE LoneStar has dropped below $2??

Either this is the craziest value play in history, or the Market knows something that is driving LONE down day after day.

Now has a Market cap below $50M.

Anyone know anything more than what is previously posted on the EPG forum and analysis.

dig4value
dan_s
Posts: 34584
Joined: Fri Apr 23, 2010 8:22 am

Re: LONE LoneStar has dropped below $2??

Post by dan_s »

LONE is not alone. All of the Sweet 16 are trading in the lower 1/3 of their 52-week range and all of them are in better shape today than they were a year ago.

Unless Lonestar reports some disappointing well results, which is highly unlikely since they are completing wells in proven areas, they should report solid Q2 results. We already know that production in Q2 will be quite a bit higher than it was in Q1.
Download their forecast model from our website and look closely at row 34. The big non-cash mark-to-market writedown of their hedges ($37.5 million) will reverse in Q2 if oil prices stay where they are through June 30.
> LONE sells 100% of their oil at LLS pricing (about a $6/bbl premium to WTI)
> LONE has ~85% of their 2019 oil hedged with WTI Swaps at $54.14/bbl.
Dan Steffens
Energy Prospectus Group
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