pq

[mkarpoff]

For the members who do not follow pq closely, I just got off the phone with their IR guy. I specifically called about their bond exchange. If you are not familiar with that, here's the deal. They have a bond that is due to mature, and be paid off in Sept 2017. Given the financial constraints of the company with these low prices, they expected to have trouble paying off the bond so they issued/exchanged a new bond that matures in 2022 to the institutional holders. Most of them did the exchange leaving small holders like us with a bond that pq should have no trouble honoring as their payoff obligation is now much smaller.
The bond yields 10% at par but, because it can be purchased at about 55, the yield is obviously much higher. The IR person also said they have no debt, cut their drilling down to basically nothing, and have enough cash to make it through 2017 even if gas prices do not improve which, like Dan, they do expect to improve given an average summer season.
I picked up the bond because I think it is a great play on pq staying in business. By the way, the memp bond is now trading at about 28.

[mkarpoff]

I said bond matures Sept 2017. It may be Nov 2017. Sorry.

[bearcatbob]

For the members who do not follow pq closely, I just got off the phone with their IR guy. I specifically called about their bond exchange. If you are not familiar with that, here's the deal. They have a bond that is due to mature, and be paid off in Sept 2017. Given the financial constraints of the company with these low prices, they expected to have trouble paying off the bond so they issued/exchanged a new bond that matures in 2022 to the institutional holders. Most of them did the exchange leaving small holders like us with a bond that pq should have no trouble honoring as their payoff obligation is now much smaller.
The bond yields 10% at par but, because it can be purchased at about 55, the yield is obviously much higher. The IR person also said they have no debt, cut their drilling down to basically nothing, and have enough cash to make it through 2017 even if gas prices do not improve which, like Dan, they do expect to improve given an average summer season.
I picked up the bond because I think it is a great play on pq staying in business. By the way, the memp bond is now trading at about 28.

Thanks. Are they still going to complete their big well in the upper zone this spring?

[mkarpoff]

Yes. It will be done on schedule. They still have to put 800k into the completion. They said that it is their last expenditure until prices go up.