LONE from SA

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bigtex
Posts: 129
Joined: Sat Apr 27, 2013 9:34 pm

LONE from SA

Post by bigtex »

http://seekingalpha.com/article/4031222 ... eset-clock

i am not sure the significance of the dire debt situation was made clear to the board. Damn near sounded like another GST. hopefully some progress is now made
k1f
Posts: 455
Joined: Tue May 04, 2010 9:47 am

Re: LONE from SA

Post by k1f »

Thanks for the heads up. In a toxic year like this, the board can use timely red flags.
dan_s
Posts: 37270
Joined: Fri Apr 23, 2010 8:22 am

Re: LONE from SA

Post by dan_s »

"Toxic Year"? The Sweet 16 is up 51.2% YTD as of 12/17/2016.

If this is a toxic year, then I can't wait until we have a "Good Year".
Dan Steffens
Energy Prospectus Group
k1f
Posts: 455
Joined: Tue May 04, 2010 9:47 am

Re: LONE from SA

Post by k1f »

<<"Toxic Year"?>> Some painful bankruptcies taking out admired companies such as Linn.
dan_s
Posts: 37270
Joined: Fri Apr 23, 2010 8:22 am

Re: LONE from SA

Post by dan_s »

The bad timing of the Berry Petroleum acquisition is what killed Linn. Timing is everything on acquisitions. When I was at Hess we "lucked out" on two big acquisitions. My team thought we grossly overpaid for Tranco just because John Hess was eager to make a deal, but higher oil & gas prices a year later made Hess look brilliant.

We sold a Mississippi package to Denbury for $40 million that ended up being worth over $1 Billion a few year later. We sold it just because John Hess did not like the management team in Mississippi.
Dan Steffens
Energy Prospectus Group
bellwj
Posts: 59
Joined: Sat May 21, 2011 1:36 pm

Re: LONE from SA

Post by bellwj »

f you own LONE, I highly recommend that you listen to their Q3 conference call and follow along on the slides.

I have updated my forecast model for LONE and posted it to the EPG website.
Your comments from a month ago. What has changed?
This will sound a bit strange:
1. I am very bullish on LONE and I have gained more confidence in my forecast model.
2. I am lowering my valuation by $3.50/share to $21.50. < Compares to First Call's price target of $13.60 and Roth Capital's valuation of $15.00.

The valuation comes down because I have lowered the production forecast and the commodity prices that I'm using in future periods. Because LONE has so few shares outstanding, small changes make a big difference in stock valuations.

That said, my confidence in LONE is higher than it was before I listened to their Q3 conference call. For a small-cap, they have a lot of running room in the Eagle Ford and I have been impressed by the leasehold blocks they've been able to put together at low costs. Their alliance with SLB is a BIG DEAL.

NOTE: If commodity prices move up to $3.00 for Ngas, $60/bbl for WTI and $15/bbl for NGLs, my valuation will go WAY UP.
Dan Steffens
dan_s
Posts: 37270
Joined: Fri Apr 23, 2010 8:22 am

Re: LONE from SA

Post by dan_s »

All that's changed is the equity offering to shore up the balance sheet. Share count has more than doubled, but strong balance sheet deserves a higher multiple. I will adjust my forecast model later this week. I got tied up most of today on another project.
Dan Steffens
Energy Prospectus Group
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