Originally posted by cmonaussie
or is that figuratively speaking?
BCG ...
1. do you believe the 2019 target production forecast of SEA?
2. do you believe that 36-37 wells will be TIL'ed in 2019
3. do you believe that $210M in Capex spend covers that avg $5.675M per well covers that
4. what ASP do you believe you need achieve the target ADJUSTED EBITDAX
Those last 2 words are important ... we are not talking about actual EBITDA.
For clarity the definition (as used by SEA) and I've bolded a couple of items
"We define “Adjusted EBITDAX”, a non-IFRS measure, as earnings before
interest expense, income taxes, depreciation, depletion and amortization, property impairments, gain/(loss) on sale of non-current assets, exploration expense, share based compensation and income, gains and losses on commodity hedging,
net of settlements of commodity hedging and items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or items that are non-recurring"
You can't (always) "spend" an adjusted EBITDAX number. An example being "finance costs" are recurring ($17.37M YTD and $6.59 in Q3) and significant. It's no a knock on SEA ... they all do it so as to get to a consistent number across peers.
So no attempt made to figure out how much cash flow from operations can reinvested and how much needs to be drawn on the revolver, other than the comment from The Erik when the revolver was extended "Sundance’s pre-existing available liquidity was sufficient to support the Company’s development program through the second half of 2019 when we anticipate being free cash flow positive." Also noted on the Earnings call was total remaining liquidity of $93M being:
Cash ($2.66M)
Existing Revolver ($55.34 ... i.e drawn amount = $20M + $12M LoC = $32M)
Plus $35M increased Revolver commitments
If SEA can control their COSTS, like they have said they can, this will help enormously with maintaining the bottom line of the spreadsheet - EBITDAX per BoE. Do that and hit the production growth target then you get to adjusted EBITDAX of $259M. Also NOT DISCUSSED (but important) is adjusted EBITDAX per share. Are you being diluted in the process of reaching the EBITDAX goal?
Have they ever let you down before?
Law of averages says we are due them hitting the mark. They have recently and while the goals get bigger even if they miss them by a margin we are sadly undervalued at 5c..we are at 5c due to the meta oil market abd sentiment imo. This only marginally affects SEAs numbers until the year ends. Therefore if you believe oil will rise back towards 18s highs surely you would agree sea is a good risk reward play at the moment? I see wti hit 50 flat today though... Opec meeting can't come soon enough. Are you a buyer and if not when?
