Maybe $0.27/share but I expect zero
Here is what I see in the 'best case'. The company in the Monthly Operating Report for May 2015, reports equity of $36 million at the end of May 2015. It looks like the company is losing around $2 million per month in equity. The bankruptcy case is probably going to go on through Jan 2016 since that is one of the deadlines that got extended. June 2015 through Jan 2016 is another 8 months, and losing $2 million per month, that is another $16 million in equity lost, leaving equity at around $20 million on Jan 31, 2016. There are 74 million shares so $20/74 give us $0.27/share.
The BIG problem, the thing that I do not trust, is that in order to realize that value is the assets need to sell for almost 100% of what they are being carried for on the books. Considering how things have been going, I would not be surprised to see a cut of at least 10% on those assets. The net of the property from the Sept 2014 10Q was $211 million. Even a 10% loss on that would take equity down by $21 million and wipe it out, leaving the common shares with nothing.
I am expecting that the properties will take a loss of 15% or more since the company is in bankruptcy and oil prices are still not where they use to be.
Louis J. Desy Jr.
AI
