Ah, the Lightstream at the end of the tunnel! Finally some serious short-covering: over $3 again and up
almost 22% today. Encore! Encore!
Finally Lightstream sees the light
-
prince_jake_33
- Posts: 242
- Joined: Mon Apr 26, 2010 2:21 pm
Re: Finally Lightstream sees the light
Does anyone have guesses on sudden price jump
Re: Finally Lightstream sees the light
I'd guess that the rumor of an OPEC production cutback in Vienna has persuaded the aggressive shorts
to start covering, and that the congestion of buyers lifted the price. The pig pile of shorts on LTO/LSTMF
was ridiculous, but hold onto your hat if OPEC squabbles and does nothing.
to start covering, and that the congestion of buyers lifted the price. The pig pile of shorts on LTO/LSTMF
was ridiculous, but hold onto your hat if OPEC squabbles and does nothing.
Re: Finally Lightstream sees the light
MORNING CALL: GOLD LEAPS ABOVE $1,200, OIL JUMPS AFTER CHINA UNEXPECTEDLY CUTS INTEREST RATES
Re: Finally Lightstream sees the light
Maybe oil has seen the bottom while Dan was doing due diligence on our cruise. Time will tell.
Re: Finally Lightstream sees the light
Dan, in your opinion will LSTMF go under? Obviously down 88% and sitting at a buck
it's priced for bankruptcy but if they will actually survive and recover some day it will
makes things a bit more tolerable.
it's priced for bankruptcy but if they will actually survive and recover some day it will
makes things a bit more tolerable.
Re: Finally Lightstream sees the light
If WTI goes to $50/bbl and stays there all year, Lightstream should generate about $250 million in cash flows from operations in 2015 (including interest payments on their debt). At that level they may be forced to quit paying dividends, but the company should survive should survive. A lot of their acreage is held by production, so they can adjust their drill budget to survive, which is what all of the E&P companies will do.
To see for yourself, down load my forecast model (it is sitting under the Watch List Tab) and change the oil price at the bottom. Macros drive the forecast models and will change earnings and cash flows. KEEP IN MIND THAT THE FORECAST IS IN CANADIAN DOLLARS.
Also keep in mind that Canadian royalty rates are adjusted by oil prices. The tax rate goes down as oil prices go down. LOE and D&C will also go down with lower fuel prices.
Near-term, I see very little risk of Lightstream going under. About 50% of Q4 oil is hedged at good prices. Current hedges are shown at the bottom of each forecast model.
To see for yourself, down load my forecast model (it is sitting under the Watch List Tab) and change the oil price at the bottom. Macros drive the forecast models and will change earnings and cash flows. KEEP IN MIND THAT THE FORECAST IS IN CANADIAN DOLLARS.
Also keep in mind that Canadian royalty rates are adjusted by oil prices. The tax rate goes down as oil prices go down. LOE and D&C will also go down with lower fuel prices.
Near-term, I see very little risk of Lightstream going under. About 50% of Q4 oil is hedged at good prices. Current hedges are shown at the bottom of each forecast model.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Finally Lightstream sees the light
Lightstream hunkers down, cuts div, markets Bakken unit, plans to protect balance sheet:
<<http://finance.yahoo.com/news/lightstre ... 21477.html
<<http://finance.yahoo.com/news/lightstre ... 21477.html
Re: Finally Lightstream sees the light
Lightstream's initial 2015 guidance, set out below, is based on an average WTI price of US$65/bbl, an AECO natural gas price of $4.00/mcf, a 10% light oil differential and a foreign exchange rate of US$/CDN$0.87.
•Capital program of $190 - $210 million funded through internally-generated cash flow, focused on capital efficiencies, recoveries and profitability;
•Two-rig program, one in each of the Bakken and Cardium business units, with a total of 51 net wells drilled;
•2015 average and exit production of 30,000 - 32,000 boe per day, 77% oil and liquids-weighted;
•Funds flow from operations of $225 million to $245 million ($1.14 to $1.24 per share);
•Reduction of monthly dividend from $0.04 to $0.015 per share, with excess funds applied to reduce debt;
•Plan to sell all or part of our Bakken business unit with proceeds to further reduce debt and position the company for focused, future growth.
I am updating the forecast model and will post it under the Watch List Tab.
•Capital program of $190 - $210 million funded through internally-generated cash flow, focused on capital efficiencies, recoveries and profitability;
•Two-rig program, one in each of the Bakken and Cardium business units, with a total of 51 net wells drilled;
•2015 average and exit production of 30,000 - 32,000 boe per day, 77% oil and liquids-weighted;
•Funds flow from operations of $225 million to $245 million ($1.14 to $1.24 per share);
•Reduction of monthly dividend from $0.04 to $0.015 per share, with excess funds applied to reduce debt;
•Plan to sell all or part of our Bakken business unit with proceeds to further reduce debt and position the company for focused, future growth.
I am updating the forecast model and will post it under the Watch List Tab.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Finally Lightstream sees the light
Moving quickly to "Survival Mode" is the right move for Lightstream. This company can "live within cash flow" for an extended period of time. Best case scenario is that they get a good price for their Bakken assets. See the updated forecast model under the Watch List Tab. More upstream companies are going to announce similar plans for 2015. This will bring down drilling and other oilfield service costs. - Dan
2015 Financial Guidance
Our balance sheet is a primary area of focus in this low oil price environment. We have no plans to increase our debt. Our capital plan is expected to generate funds flow from operations of $225 to $245 million in 2015, with $190 to $210 million in capital spending and a revised annual dividend of $36 million. We intend to use any surplus cash to repay debt.
In addition to our reduced capital expenditures and our dividend initiatives, we will continue to pursue minor asset dispositions in 2015 with all proceeds directed towards further debt reduction. We plan to apply excess cash to both our high yield notes and our secured credit facility.
In 2014, we executed a $729 million asset divesture program resulting in significant debt reduction and an improved liquidity position. We used proceeds from our dispositions in 2014 to pay down our secured credit facility as well as repurchase US$100 million of principal of our high yield notes. As a result of these activities, we expect $30 million in annual interest savings going forward. We currently have $600 million undrawn under our secured credit facility. This facility has a maturity of June 2017 and we are in compliance with all covenants.
At today's oil price and current industry service costs, it is imprudent to continue to pay a dividend at our 2014 level. We have chosen to reduce our monthly dividend to $0.015 per share commencing with the December 2014 dividend payable on January 15, 2015. Depending on future material movements in the price of oil, and our success in executing our asset monetization, we will review our dividend policy further.
2015 Outlook
Our industry is experiencing challenging times with low oil pricing and high capital/service costs that have yet to adjust to current oil prices. We are taking proactive steps to preserve the financial viability and long term prospectivity of Lightstream through significant changes to our capital and dividend program, which we believe are prudent decisions in this environment. In addition, we believe there is a significant disconnect in the long term value of Lightstream and what is currently recognized in share and debt valuations. We have been successful in the past in unlocking unrecognized value through asset dispositions and we will endeavor to repeat it through the potential disposition of our Bakken business unit over the next 12 to 24 months. In the event that we are unable to achieve appropriate valuation for this transaction, we will retain our Bakken business unit and continue to operate and invest in it to maintain and enhance its long-term cash flow generating capacity, while preserving our optionality to execute a similar transformative transaction in the future. A successful transaction will allow us to significantly restructure our balance sheet with an Alberta Cardium and Swan Hills focused Company.
In the event of further material changes in the oil price environment, we will adjust our capital plans and dividend policies accordingly. We can further taper our drilling program in the face of even lower oil prices and we can also increase activity if there is sustained improvement in the industry's economic environment. We will continue to maintain the maximum flexibility in our plans.
2015 Financial Guidance
Our balance sheet is a primary area of focus in this low oil price environment. We have no plans to increase our debt. Our capital plan is expected to generate funds flow from operations of $225 to $245 million in 2015, with $190 to $210 million in capital spending and a revised annual dividend of $36 million. We intend to use any surplus cash to repay debt.
In addition to our reduced capital expenditures and our dividend initiatives, we will continue to pursue minor asset dispositions in 2015 with all proceeds directed towards further debt reduction. We plan to apply excess cash to both our high yield notes and our secured credit facility.
In 2014, we executed a $729 million asset divesture program resulting in significant debt reduction and an improved liquidity position. We used proceeds from our dispositions in 2014 to pay down our secured credit facility as well as repurchase US$100 million of principal of our high yield notes. As a result of these activities, we expect $30 million in annual interest savings going forward. We currently have $600 million undrawn under our secured credit facility. This facility has a maturity of June 2017 and we are in compliance with all covenants.
At today's oil price and current industry service costs, it is imprudent to continue to pay a dividend at our 2014 level. We have chosen to reduce our monthly dividend to $0.015 per share commencing with the December 2014 dividend payable on January 15, 2015. Depending on future material movements in the price of oil, and our success in executing our asset monetization, we will review our dividend policy further.
2015 Outlook
Our industry is experiencing challenging times with low oil pricing and high capital/service costs that have yet to adjust to current oil prices. We are taking proactive steps to preserve the financial viability and long term prospectivity of Lightstream through significant changes to our capital and dividend program, which we believe are prudent decisions in this environment. In addition, we believe there is a significant disconnect in the long term value of Lightstream and what is currently recognized in share and debt valuations. We have been successful in the past in unlocking unrecognized value through asset dispositions and we will endeavor to repeat it through the potential disposition of our Bakken business unit over the next 12 to 24 months. In the event that we are unable to achieve appropriate valuation for this transaction, we will retain our Bakken business unit and continue to operate and invest in it to maintain and enhance its long-term cash flow generating capacity, while preserving our optionality to execute a similar transformative transaction in the future. A successful transaction will allow us to significantly restructure our balance sheet with an Alberta Cardium and Swan Hills focused Company.
In the event of further material changes in the oil price environment, we will adjust our capital plans and dividend policies accordingly. We can further taper our drilling program in the face of even lower oil prices and we can also increase activity if there is sustained improvement in the industry's economic environment. We will continue to maintain the maximum flexibility in our plans.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group