Energy Prospectus

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

Thanks for the heads up. In a toxic year like this, the board can use timely red flags.

"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".

<<"Toxic Year"?>> Some painful bankruptcies taking out admired companies such as Linn.

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.

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

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.