GST

[Wade4213]

Dan-

Liquidity on GST/B has dried up starting last Friday. During the past two days only 1,300 shares were traded according to Yahoo. No shares appear to have traded today as of 11:-00 AM EDT.

Is this a good sign, bad sign or just bad data?

Thanks for any insight.

T

[Fosterplc]

Don't know what data you're looking at, but fidelity reports volume of 92K as of 10.15 central time. Still trading in steady volumes as far as I can see.

[TexAg82]

Wade is talking about the Preferred B shares, not the common which appears to be the volume number you are quoting. My trading platform shows 907 Pref B and 3428 Pref A as of 11:20 AM CST today.

[dan_s]

There is very little float on the Gastar preferred stock. Low trading volume is expected since the weak hands have sold.

My take on Gastar is that it is HIGH RISK. This year's drilling program MUST BE SUCCESSFUL in proving up their Oklahoma leasehold. If all goes as planned they will sell a large chunk of leasehold and that will make all of the debt holders happy.

They call it "preferred" for a reason. IMO the way to play Gastar is the preferred stock. They are definitely a takeover target and if a large-cap like CLR, DVN, NFX, XEC or MRO takes them over, the debt and preferred stock will be taken out at par. Also, keep in mind that the preferred stock is "cumulative".

[Wade4213]

Thanks Dan-

I was just concerned as average volume is about 12,000 per day, but three of last 5 have been under 1,000 shares. Maybe it's good that there aren't a lot of sellers at any price. I'm hoping for a buyout by one of the majors in the area.

Time will tell.

Also bought some RRC yesterday. Nice pop today.

T

[letitfly]

Dan
What are the odds that accompany wanting GST's properties might let them dangle in bankruptcy and purchase then, rather than an outright purchase with the obligation of the preferreds?

[dan_s]

I doubt GST will need to go the Chapter 11 route unless the nine well program has bad results. Wells Fargo is the only one that can force them to and the bank has first lien on their assets.
If the nine well program gets production up to 7,000 Boepd they should survive.

[bearcatbob]

My sense is that the drilling simply needs to prove the value of the assets.

[bearcatbob]

There is some complete disconnect in the financial perceptions of companies mentioned on this forum.

CRK did some kind of refi and has soared.

Tonight PQ has announced some kind of refi and shows strong in the after market.

IMO Dan feels the risks of GST are such he cannot go any further in terns of recommending. I can only wonder if PQ and CRK can successfully refi - that GST should be a prime fly opportunity.

Bob

[dan_s]

CRK and PQ are both "gassers". They both have a lot of debt, but should be fine if gas prices go where I predict that they will this winter.

CRK was a big winner for us several years ago.

[setliff]

i got out on basis that its dead money until april when they have to get right with the debt.

and i will be watching drilling results. could be some action before april---time will tell.