I really thought LTS might actually have an up day on that news. Wrong again.
I hope I live long enough to break even on this one.
Finally Lightstream sees the light
Re: Finally Lightstream: the bear case
FWIW: Here's a strong statement of the bear case against Lightstream. It sees little likelihood of a productive
sale of Bakken turf, and headlines "Sustainabiity" concerns. It's clearly the scenario shorts believe as they pile on:
<<Lightstream Resources Ltd. (LTS $1.34) Sector Underperform Target 12 MO $0.25 2015 Capital Program Dividend Reduced; Sustainability Remains a Concern
2015 Budget & Guidance: Lightstream announced a $200 MM capital budget for 2015 and production guidance of 30 MBOE/d to 32 MBOE/d. The production guidance compares to our 2014 exit rate of ~36 MBOE/d, with our revised production estimates representing a ~17% decline YoY (Q4/15E versus Q4/14E). Incorporating a lower capital program (from $300 MM to $200 MM), reduces our 2015E production and cash flow estimates by ~9% (see summary of changes below). The capital program will be weighted ~73% to E&D spending primarily in the Cardium and in SE Saskatchewan, with no operated capital in the Swan Hills given the challenging economics in the play.
Dividend Reduction & Sustainability: The lower capital program is a necessary step, however, given the high debt levels and declining production profile we view the dividend as unsustainable. Lightstream reduced the dividend by 63% (to $0.015 per month), and despite the attractive yield, we believe further reductions will be necessary. Based on our revised estimates at current strip pricing, we forecast rising debt levels with a 2015 D/CF ratio of 7.4 times and total payout of ~171%. Our estimates indicate the company will breach a covenant on its credit facility in H2/15 (see table on
Potential Bakken Disposition: The company announced plans to sell its Bakken unit over the next 12 to 24 months to reduce debt levels. The asset includes production of ~12 MBOE/d (2015E) and has a moderate decline rate, but limited inventory. While there are several possible outcomes in a sales process, we believe there are few logical buyers, and anticipate that a sale would not materially improve the outlook. We provide a summary of a possible sale scenarios in the table on page one on our 2016 estimates.
Recommendation: Lightstream currently trades above our base NAV of $0.25 per share, and at a 2015 EV/DACF multiple of 6.0 times, (2016 EV/DACF multiple of 6.9 times). Given the company’s high debt levels and declining production profile, we believe the dividend needs to be eliminated and improvements on the base assets are necessary to improve the outlook and support the current valuation. We maintain our Sector Underperform recommendation with a reduced 12-month target price of $0.25 per share ($1.50 previously). Our price target is based on our base NAV and equates to a 2015E EV/DACF multiple of ~5.3 times. (LEWKO)
>>
sale of Bakken turf, and headlines "Sustainabiity" concerns. It's clearly the scenario shorts believe as they pile on:
<<Lightstream Resources Ltd. (LTS $1.34) Sector Underperform Target 12 MO $0.25 2015 Capital Program Dividend Reduced; Sustainability Remains a Concern
2015 Budget & Guidance: Lightstream announced a $200 MM capital budget for 2015 and production guidance of 30 MBOE/d to 32 MBOE/d. The production guidance compares to our 2014 exit rate of ~36 MBOE/d, with our revised production estimates representing a ~17% decline YoY (Q4/15E versus Q4/14E). Incorporating a lower capital program (from $300 MM to $200 MM), reduces our 2015E production and cash flow estimates by ~9% (see summary of changes below). The capital program will be weighted ~73% to E&D spending primarily in the Cardium and in SE Saskatchewan, with no operated capital in the Swan Hills given the challenging economics in the play.
Dividend Reduction & Sustainability: The lower capital program is a necessary step, however, given the high debt levels and declining production profile we view the dividend as unsustainable. Lightstream reduced the dividend by 63% (to $0.015 per month), and despite the attractive yield, we believe further reductions will be necessary. Based on our revised estimates at current strip pricing, we forecast rising debt levels with a 2015 D/CF ratio of 7.4 times and total payout of ~171%. Our estimates indicate the company will breach a covenant on its credit facility in H2/15 (see table on
Potential Bakken Disposition: The company announced plans to sell its Bakken unit over the next 12 to 24 months to reduce debt levels. The asset includes production of ~12 MBOE/d (2015E) and has a moderate decline rate, but limited inventory. While there are several possible outcomes in a sales process, we believe there are few logical buyers, and anticipate that a sale would not materially improve the outlook. We provide a summary of a possible sale scenarios in the table on page one on our 2016 estimates.
Recommendation: Lightstream currently trades above our base NAV of $0.25 per share, and at a 2015 EV/DACF multiple of 6.0 times, (2016 EV/DACF multiple of 6.9 times). Given the company’s high debt levels and declining production profile, we believe the dividend needs to be eliminated and improvements on the base assets are necessary to improve the outlook and support the current valuation. We maintain our Sector Underperform recommendation with a reduced 12-month target price of $0.25 per share ($1.50 previously). Our price target is based on our base NAV and equates to a 2015E EV/DACF multiple of ~5.3 times. (LEWKO)
>>
Re: Finally Lightstream sees the light
The bears are downgrading Lightstream. Here's RBC's take on the prospects:
<<https://rbcnew.bluematrix.com/docs/pdf/ ... f6fe43.pdf?
RBC is grim, but less concerned about fatality than the assessment below, which I posted here earlier today, tho the EP website isn't showing it, so here it is again:
<<Lightstream Resources Ltd. (LTS $1.34) Sector Underperform Target 12 MO $0.25 2015 Capital Program Dividend Reduced; Sustainability Remains a Concern
2015 Budget & Guidance: Lightstream announced a $200 MM capital budget for 2015 and production guidance of 30 MBOE/d to 32 MBOE/d. The production guidance compares to our 2014 exit rate of ~36 MBOE/d, with our revised production estimates representing a ~17% decline YoY (Q4/15E versus Q4/14E). Incorporating a lower capital program (from $300 MM to $200 MM), reduces our 2015E production and cash flow estimates by ~9% (see summary of changes below). The capital program will be weighted ~73% to E&D spending primarily in the Cardium and in SE Saskatchewan, with no operated capital in the Swan Hills given the challenging economics in the play.
Dividend Reduction & Sustainability: The lower capital program is a necessary step, however, given the high debt levels and declining production profile we view the dividend as unsustainable. Lightstream reduced the dividend by 63% (to $0.015 per month), and despite the attractive yield, we believe further reductions will be necessary. Based on our revised estimates at current strip pricing, we forecast rising debt levels with a 2015 D/CF ratio of 7.4 times and total payout of ~171%. Our estimates indicate the company will breach a covenant on its credit facility in H2/15 (see table on
Potential Bakken Disposition: The company announced plans to sell its Bakken unit over the next 12 to 24 months to reduce debt levels. The asset includes production of ~12 MBOE/d (2015E) and has a moderate decline rate, but limited inventory. While there are several possible outcomes in a sales process, we believe there are few logical buyers, and anticipate that a sale would not materially improve the outlook. We provide a summary of a possible sale scenarios in the table on page one on our 2016 estimates.
Recommendation: Lightstream currently trades above our base NAV of $0.25 per share, and at a 2015 EV/DACF multiple of 6.0 times, (2016 EV/DACF multiple of 6.9 times). Given the company’s high debt levels and declining production profile, we believe the dividend needs to be eliminated and improvements on the base assets are necessary to improve the outlook and support the current valuation. We maintain our Sector Underperform recommendation with a reduced 12-month target price of $0.25 per share ($1.50 previously). Our price target is based on our base NAV and equates to a 2015E EV/DACF multiple of ~5.3 times. (LEWKO)>>
<<https://rbcnew.bluematrix.com/docs/pdf/ ... f6fe43.pdf?
RBC is grim, but less concerned about fatality than the assessment below, which I posted here earlier today, tho the EP website isn't showing it, so here it is again:
<<Lightstream Resources Ltd. (LTS $1.34) Sector Underperform Target 12 MO $0.25 2015 Capital Program Dividend Reduced; Sustainability Remains a Concern
2015 Budget & Guidance: Lightstream announced a $200 MM capital budget for 2015 and production guidance of 30 MBOE/d to 32 MBOE/d. The production guidance compares to our 2014 exit rate of ~36 MBOE/d, with our revised production estimates representing a ~17% decline YoY (Q4/15E versus Q4/14E). Incorporating a lower capital program (from $300 MM to $200 MM), reduces our 2015E production and cash flow estimates by ~9% (see summary of changes below). The capital program will be weighted ~73% to E&D spending primarily in the Cardium and in SE Saskatchewan, with no operated capital in the Swan Hills given the challenging economics in the play.
Dividend Reduction & Sustainability: The lower capital program is a necessary step, however, given the high debt levels and declining production profile we view the dividend as unsustainable. Lightstream reduced the dividend by 63% (to $0.015 per month), and despite the attractive yield, we believe further reductions will be necessary. Based on our revised estimates at current strip pricing, we forecast rising debt levels with a 2015 D/CF ratio of 7.4 times and total payout of ~171%. Our estimates indicate the company will breach a covenant on its credit facility in H2/15 (see table on
Potential Bakken Disposition: The company announced plans to sell its Bakken unit over the next 12 to 24 months to reduce debt levels. The asset includes production of ~12 MBOE/d (2015E) and has a moderate decline rate, but limited inventory. While there are several possible outcomes in a sales process, we believe there are few logical buyers, and anticipate that a sale would not materially improve the outlook. We provide a summary of a possible sale scenarios in the table on page one on our 2016 estimates.
Recommendation: Lightstream currently trades above our base NAV of $0.25 per share, and at a 2015 EV/DACF multiple of 6.0 times, (2016 EV/DACF multiple of 6.9 times). Given the company’s high debt levels and declining production profile, we believe the dividend needs to be eliminated and improvements on the base assets are necessary to improve the outlook and support the current valuation. We maintain our Sector Underperform recommendation with a reduced 12-month target price of $0.25 per share ($1.50 previously). Our price target is based on our base NAV and equates to a 2015E EV/DACF multiple of ~5.3 times. (LEWKO)>>