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Richard Zeits  

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  • Laredo Petroleum: Production Growth Stalls, Despite Strong Price Realizations [View article]
    Hi RG3015,

    I actually would not read too much in LPI not testing the Lower Spraberry Shale - they have their hands full with the Wolfcamp/Cline. Another reason, it is time to play defense. Experimentation is both expensive and risky. If the result is poor, investors will be disappointed. If the result is good, there may be no impact on the stock price as the company does not have shortage of inventory.

    With regard to the production profile, the reduction in spending was very deep from Q4 to Q2.
    Aug 20, 2015. 06:32 PM | Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Clark-

    With regard to Tuttle, it indeed looks interesting. Blocked up acreage.

    I am just wondering whether (1) it is too far updip into the oil window and therefore does the formation have enough energy in it to get the oil to the surface; and (2) is it the area where the Woodford is a bit thinner relative to the Cana and Scoop?

    The devil is in the detail here. I can imagine that LINN has some very high quality acres within its portfolio as well as acres that no one would want to drill on.

    LINN finally posted a detailed map in their latest presentation that describes their acreage positions. It is a very helpful map. In fact, it shows that some of their acres are in within the current activity areas. If you have not seen it, you may find that map very helpful (it's p. 10 of the August presentation).
    Aug 20, 2015. 02:35 PM | 2 Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Chancer,

    I think "the drop dead" date is twice a year for any company that has bank debt and needs to go through borrowing base re-determination.

    I totally agree that buying back unsecured notes helps, but one needs to have a lot of cash available that is not subject to restrictions under senior facility to be effective. Not obvious how much more "dry powder" does LINN have to pursue bond buybacks. But certainly a very positive step and I like the size of the most recent repurchase.
    Aug 19, 2015. 06:32 PM | 1 Like Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Hi Clark,

    If you are in Oklahoma, you probably have all the scoop on SCOOP, STACK and beyond.

    NFX, CLR, Marathon and few others have been very active in the SCOOP for quite some time. How does LINE's acreage map relative to peer acreage and to peer activity? How does LINE's acreage map against STACK activity? Why does one need to drill vertical tests to confirm prospectivity if peers have already delineated big chunks of what is believed to be prospective acreage? Very much welcome your insight.

    With regard to Major County, there has been a number of modern-age Miss horizontals drilled. I would not call it completely untested. The trick is, of course, Major County, or at least a big part of it, would be different from what is going on in Kingfisher/Canadian/ Grady/Stephens area.
    Aug 19, 2015. 06:26 PM | 1 Like Like |Link to Comment
  • Laredo Petroleum: Production Growth Stalls, Despite Strong Price Realizations [View article]
    dmrosy,

    I don't think I did say that LPI is not using leading-edge techniques. I just do not know how much optimization work have they done and how their completion recipe compares to those of operators with top well results.

    As I mentioned, completions have been an area of rapid and radical evolution throughout the industry in the past two years. I hope LPI has some upside on that front. But I don not have insight as to whether such upside exists.
    Aug 19, 2015. 06:03 PM | Likes Like |Link to Comment
  • Laredo Petroleum: Production Growth Stalls, Despite Strong Price Realizations [View article]
    Bankstocks,

    I don't disagree that LPI has set itself up very well for developing its core acreage.

    With regard to acreage valuation in the most recent sale, the way I look at it, I like to separate the value of existing production from undeveloped acreage. The implied value of undeveloped acreage is not that high, once I do my estimate.

    From a location standpoint, I do not see anything "non-core" about at least some of the sections in which the sold acreage was located. But I agree with you that non-op nature of the acreage and other lease parameters may have made a difference.

    I have not been in the dataroom to have a view, but on the surface, the price does not send a particularly positive message, in my opinion.
    Aug 19, 2015. 05:58 PM | Likes Like |Link to Comment
  • Chesapeake Energy: Major Asset Sales Are Inevitable [View article]
    Hi N-USA,

    Thank you for taking the time to read.
    Aug 18, 2015. 08:37 PM | 3 Likes Like |Link to Comment
  • Laredo Petroleum: Production Growth Stalls, Despite Strong Price Realizations [View article]
    Pablomike,

    LPI is a little higher than 45% - I would compare on the first 180-day basis, to be on the apples-to-apples basis.

    The driver is the reservoir. There is nothing wrong with a lower oil percentage (in fact, higher GOR may be helpful in getting oil out of the ground), as long as there is enough oil to provide an adequate return. FANG and PXD metrics look much stronger, when looking at their sweet-spot wells.
    Aug 18, 2015. 05:15 PM | 1 Like Like |Link to Comment
  • Chesapeake Energy: Major Asset Sales Are Inevitable [View article]
    Hi Mark,

    The Trust is really a standalone story. I hope to post my updated model within a week or two. On my to do list.
    Aug 18, 2015. 05:11 PM | 3 Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Raw Energy,

    This is a very valid point. I agree.
    Aug 18, 2015. 02:51 PM | 1 Like Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Scooter-Pop,

    Declines are less pronounced.
    Aug 18, 2015. 10:57 AM | 2 Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Turmantl,

    Thank you for taking the time to read.

    A debt repurchase of the magnitude you are referring to would require a tender or exchange offer (as opposed to the unsolicited repurchases that we often hear about in the E&P sector).

    There are certainly precedents of similar transactions successfully executed. Hedge monetization could indeed by a source of funds (LINE does not monetize its hedges in their entirety to keep its cash flow protected at a minimum level).

    However, proceeding with a radical restructuring of this sort requires a vision and a lot of political will, execution skill, and luck.

    The Ford case study is relevant in this regard.
    Aug 18, 2015. 10:22 AM | 2 Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Scooter-Pop,

    Bankers are typically not positioned to take risk in excess of their secured and relatively safe lending position. In fact, their purpose is to avoid being the owner of the assets by all means possible.

    A going-private transaction would be funded by private equity.

    Assuming there is enough value in the assets to cover senior debt, one can imagine an outside entity taking ownership of unsecured debt at a discount.
    If commodity prices recover, unsecured debt may gain substantially in value. If, on the other hand, the company continues to struggle, unsecured debt may become equity and a mechanism for effective control.

    Another strategy for a private equity provider is to come in via a second lien offering, assuming the company needs a second lien.

    Going private via taking over equity does not make much sense, in my opinion, let alone prohibitive change of control provisions that are typical for public debt.
    Aug 18, 2015. 09:57 AM | 6 Likes Like |Link to Comment
  • Linn Energy - Is A Rebound On The Horizon? [View article]
    Scooter-Pop,

    Going private is a very interesting idea indeed. However, I would argue, the traditional venue of doing that would be via establishing a controlling position in debt in this situation, not in equity.

    I would also argue that one would need to see sufficient value in assets and a roadmap to the ultimate profitable exit.
    Aug 18, 2015. 09:42 AM | 3 Likes Like |Link to Comment
  • Chesapeake Energy: $3.3 Billion Permian Asset Sale Disappoints [View article]
    Hi Rons Dixon,

    Thank you for the links. I will have a look at details.

    Kind regards,

    Richard
    Aug 17, 2015. 12:29 PM | Likes Like |Link to Comment
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