thoughts, page-5

Where has the company stated it will be debt free by June 30?

I'm an oil bull but I worship free cash flow & then capital allocation and these are my issues with CE1.

People speak about EBITDA but this is a completely meaningless metric for oil producers especially shale plays who constantly have huge amounts the D & A (capex) just to keep production steady. It's not possible to understand what the all in free cash flow breakeven would be but I'd suspect it's around $70/boe or higher, even $80+/boe since service companies are charging an insane amount at the moment and this is a small cap with high G&A costs/boe.

This means there is huge leverage to oil prices. If oil goes back to $80/boe, then this won't make money. If oil is at $60/boe for a couple years, then this will disappear. If oil is at $100/boe for ~two years then it'll make it's enterprise value in cash. The range of outcomes here is very wide.

However, even if oil remains high and it mints cash, you then have to worry about management wanting to drill & increase output rather than return capital. Then at some point the oil cycle turns and it blows up. This is the most likely outcome in my view.

There are much higher quality upsteam plays with much lower breakevens, higher quality reserves, lower capital management risks that make this still unappealing at this price.

People will think i'm downramping but this is so far away from where i'd be a buyer and even if I were a buyer, I would not even consider putting in more than a fraction of my portfolio because it's so risky.

This is not Allegiance Coal but there are similarities. Why would you invest in this when there are other much higher quality oil plays that give you the same or higher upside but are way less risky.