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GST preferreds
Posted: Tue Dec 16, 2014 7:37 pm
by kenm
Dan, you rated the Gastar preferreds "rock solid" a few weeks ago. Do you still feel that way? I saw that the CFO Michael Gerlich bought a couple batches of B recently, including last Friday. I spoke to him last week and he is confident in them, what do you think?
Re: GST preferreds
Posted: Tue Dec 16, 2014 9:11 pm
by dan_s
Yes, I do think their pfd stock is rock solid (i.e. - they will have no problem paying the dividends)
Here's why:
> Production mix in 2015: 15,000 boepd (52% natural gas, 28% crude oil and 20% NGLs) < 48% YOY production growth
> 40% of 2015 crude oil is hedged at over $85/bbl
> 30% of 2015 natural gas is hedged at $4.12/mcf
> Natural gas price and NGL prices are holding up much better than crude oil prices because they trade on regional markets
> Balance sheet is in good shape, thanks to equity offering that raised over $100 million.
> $173 million budget for 2015 is totally funded.
You can find more details on my forecast model, which is under the Watch List Tab.