In case you're thinking I'm making this up.
http://www.ft.com/intl/cms/s/0/6666ee40-7c7e-11e4-9a86-00144feabdc0.html#axzz3RsC7aJNc
So far I've only really seen one company stress test the value of their reported 1P Reserves - and that would be LNR
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01595580
They highlighted the value of 1P Reserves from EFS + Conventional Assets + Hedges from a low of $45 WTI to a high of $95 WTI
At the $45 Low = $281M ($200M + $22M + $60M)
At the $95 High = $937M ($890 + $62M + ($16M))
Kudos LNR for laying out what the assets are worth in varying price scenarios!
Like I've said I'm watching a couple of my USA stocks warn a Qtr ahead of time (and yet the Bankers don't call the loan in - it is a contract plus they would of course rather not call these loans but they are Bankers and are paid to manage risk).
Here is an excerpt taken straight from Standard and Poor's the bolding is mine and it refers to EXXI.
"We expect debt to EBITDA to exceed 5.5x in 2015 and FFO/debt to remain below 12%, which we consider inconsistent with the rating. The negative outlook reflects the risk of additional deterioration of the company's credit measures, and potential restriction in the company's ability to borrow under its revolving credit facility if it fails to address its covenant issues to allow for covenant cushion."
taken from
http://www.google.com.au/url?sa=t&r...Wmu92X2pNQGd2CA&bvm=bv.85970519,d.dGc&cad=rja
Just why I'm cautious.
Add to My Watchlist
What is My Watchlist?