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16.5¢ sundance energy australia limited

up over 9% on opening

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moremoneyplease

2,558 Posts.

181

07/01/20

01:45

Post #: 42254928
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Originally posted by cmonaussie: ↑

IMO they are not rubbish operationally when compared with SNDE. If growing production (by at least 15%) and generating +ve FCF ... sounds familiar ... then they have a lot of companions in the rubbish category. Most of their peers if you go by the IE report.

Their disadvantage is their debt load with those pesky Pref shares ... no doubt about it.
I make their leverage ratio around mid 3s for y/e 2019 which is a concern and projected just over 3 for 2020. Ideally this needs to be below 3 (as SNDE is well below 3). Worst still for LONE if one assumes PFS are converted to notes and not equity ... true junk bond with leverage ratio over 4.

So yes, some form of corp action is likely necessary ... bit like SNDE in that regard when it doubled its equity along with raising debt ... they chose the PFS route and almost got away with it when stock was around $11 couple of years back. They should have issued common equity then ... but hindsight is easy ... bit like over $21 tonight just to see it trade down in the $18s. Tough to put a price target.

Plenty of similarities with the 2 of them ... both sold off acreage after taking large impairments. LONE still has its eastern EFS with a for sale sign on it.

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up over 9% on opening

SEA Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
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