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
Re: Finally Lightstream sees the light
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.
I hope I live long enough to break even on this one.
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)>>