Lightstream (LSTMF)
Lightstream (LSTMF)
Cuts dividend by 50% - stock down over 7%. Comments?
Re: Lightstream (LSTMF)
Strategic Plan for Lightstream below. When the smoke clears, this should make the company stronger. I am updating my forecast model and I will post it under the Watch List tab soon. - Dan
Our 2014 plans represent the next step in our multi-year effort to improve our long-term sustainability and capacity to deliver growth plus yield for our shareholders. In 2014, we will focus on improving our sustainability ratio (cash outflows to cash inflows) and strengthening our balance sheet by reducing debt levels while maintaining production at 2013 levels. Although our focus in 2014 will be primarily on our balance sheet initiatives, our portfolio of opportunities allows us to plan for long-term realization of our growth plus yield model. Our plan incorporates a number of strategic efforts which include:
1.Executing on our 2014 capital program of $525-575 million (65% focused on drilling and completions) while maintaining production levels similar to 2013. This capital plan represents a decrease of approximately 25% from estimated 2013 capital spending and 42% from 2012 levels. Notwithstanding this significant decrease in capital, we expect our production levels to remain relatively flat to 2013. We intend to execute a relatively balanced capital plan between the first and second half of 2014.
2.Terminating the dividend reinvestment plan ("DRIP") and share dividend plan ("SDP") and reducing our dividend by 50% to $0.04 per month, resulting in an estimated $40 million in annual cash savings and elimination of the dilution created by issuing shares through the DRIP and SDP at current low prices.
3.Targeting over $600 million of non-core asset sales by the end of 2015 and applying the proceeds to reduce debt levels. Provided market conditions are acceptable, our goal is to close at least 50% of the asset sales in 2014. The pace and timing of asset sales may impact our production guidance for the year.
Our 2014 plans represent the next step in our multi-year effort to improve our long-term sustainability and capacity to deliver growth plus yield for our shareholders. In 2014, we will focus on improving our sustainability ratio (cash outflows to cash inflows) and strengthening our balance sheet by reducing debt levels while maintaining production at 2013 levels. Although our focus in 2014 will be primarily on our balance sheet initiatives, our portfolio of opportunities allows us to plan for long-term realization of our growth plus yield model. Our plan incorporates a number of strategic efforts which include:
1.Executing on our 2014 capital program of $525-575 million (65% focused on drilling and completions) while maintaining production levels similar to 2013. This capital plan represents a decrease of approximately 25% from estimated 2013 capital spending and 42% from 2012 levels. Notwithstanding this significant decrease in capital, we expect our production levels to remain relatively flat to 2013. We intend to execute a relatively balanced capital plan between the first and second half of 2014.
2.Terminating the dividend reinvestment plan ("DRIP") and share dividend plan ("SDP") and reducing our dividend by 50% to $0.04 per month, resulting in an estimated $40 million in annual cash savings and elimination of the dilution created by issuing shares through the DRIP and SDP at current low prices.
3.Targeting over $600 million of non-core asset sales by the end of 2015 and applying the proceeds to reduce debt levels. Provided market conditions are acceptable, our goal is to close at least 50% of the asset sales in 2014. The pace and timing of asset sales may impact our production guidance for the year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Lightstream (LSTMF)
Lightstream Resources Ltd. (LTS.TO and LSTMF): The company has announced a "Strategic Plan" to shore up their balance sheet while maintaining their current production rate. An updated Net Income & Cash Flow Forecast model has been posted under the Watch List Tab.
Investors seeking double digit yield are selling, but I like their plan. It will shore up the balance sheet and they still maintain a nice dividend.
Investors seeking double digit yield are selling, but I like their plan. It will shore up the balance sheet and they still maintain a nice dividend.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Lightstream (LSTMF)
This plan is very similar to the one adopted by Peyto several years back when they converted from an unit trust to a regular corporation. They cut their dividend in half and proceeded to substantially grow reserves and shareholder value. Additionally they recently restored half of the dividend cut. Seems like a prudent move by Lightstream as they have good properties and the market has been discounting them heavily due to the sustainability issue.
Re: Lightstream (LSTMF)
Since they've already indicated the intent to buy back 10% of their stock, it doesn't get better than buying it at an all time low.
I'm really surprised there was that much selling today, pretty short sighted. Otoh, I sure don't want to see tax loss selling
on top of all the fun we've already had.
I'm really surprised there was that much selling today, pretty short sighted. Otoh, I sure don't want to see tax loss selling
on top of all the fun we've already had.
Re: Lightstream (LSTMF)
Lightstream's plan is to pay down debt, which will grow the equity. Doesn't that make the common stock more valuable?
IMO the selling today was "panic selling" by investors that were just chasing the high yield dividends.
If the plan works, Lightstream will be a more stable company and it still pays a healthy dividend.
Check out my forecast model. They should generate over $3.00 operating CFPS. I cannot name a single E&P company that has over 1,000 low-risk development drilling locations that is trading for less than 2X CFPS.
For example, the Sweet 16 trades for more than 7X CFPS. Plus, the Sweet 16 doesn't pay dividends anywhere close to what Lightstream pays.
Q4 production should be 45,500 to 46,000 boepd (more than 75% light oil).
Year-end reserve report should show a nice increase in proven reserves and a big increase in PV10 because of higher reserves + higher oil & gas prices.
I'm not trying to oversell Lightstream. Just pointing out that the plan they announced today makes sense and this company has more than enough production and reserves to survive.
IMO the selling today was "panic selling" by investors that were just chasing the high yield dividends.
If the plan works, Lightstream will be a more stable company and it still pays a healthy dividend.
Check out my forecast model. They should generate over $3.00 operating CFPS. I cannot name a single E&P company that has over 1,000 low-risk development drilling locations that is trading for less than 2X CFPS.
For example, the Sweet 16 trades for more than 7X CFPS. Plus, the Sweet 16 doesn't pay dividends anywhere close to what Lightstream pays.
Q4 production should be 45,500 to 46,000 boepd (more than 75% light oil).
Year-end reserve report should show a nice increase in proven reserves and a big increase in PV10 because of higher reserves + higher oil & gas prices.
I'm not trying to oversell Lightstream. Just pointing out that the plan they announced today makes sense and this company has more than enough production and reserves to survive.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group