Good post, I admit I don't normally follow stocks with debt so this has been a new experience and always plenty to learn. I understand some of your points re covenants though and look forward to the quarterly to clarify a few things.
Below is my guesstimate for March qtr, I have no knowledge other than from the coy ann's plus my own interpretation so please take with grain of salt and in the spirit of discussion purposes only. As always appreciate any feedback whether good or bad. I have approached my model more on YTD basis to identify what could be done planning wise to meet the guidelines rather than just look at the short term, whilst agreeing that assumptions can be dangerous I think the debt is manageable medium term but think there probably wasn't much could be done for March.
Medium term I think what will help are a mix of G&A savings, production efficiency cost savings and increase to OP. Setting a sweet spot for production to maximise margin is imo the most important thing to ensure a good denominator without giving away too much cheap oil.
View attachment 53393
This result annualised imo would not look flash but in context with early stage production and other savings initiatives could be explained and improved.
Notes:
- Production costs based on Dec qtr plus 24% royalty/tax on sales Income using ratio of average NRI to gross WI. I tried to reconcile the logic to Sept/Dec qtrlys which roughly made sense but not exact.
- Hedging gain based on reduction in hedge position from Feb ann less Dec x SP diff plus estimate for March
- Production volume comes from my guess based on producing wells per Feb Ann plus the other ones not in the ann. Doesn't include the 6 new ones.
- I used $14 on the BD
Remember (Warning Will Robinson) it's a best guess and shouldn't be used for decision making.
Cheers
