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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area
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To: Crossy who wrote (33959)1/25/2009 9:19:54 AM
From: Ed Ajootian  Read Replies (3) of 37387
 
Crossy, Endeavour International (END) -- great post, great to see your interest in one of my faves.

Your ideas about doing some financial engineering are good in theory but IMO this is not the time to be thinking about that stuff. END has just made a significant discovery at Rochelle and it would not surprise me to hear that their share of the cost for getting that field into production would be as much as $150 M (i.e. $10/bbl.). I hope its less but the cost structure in the North Sea is one of the highest in the world.

In light of this, I believe the company would be best served by just hunkering down and holding onto every penny (pence) it can, to reduce the amount of new debt it will have to take on to see its current development projects into production. Once they start bringing on some of these new projects, currently expected around the middle of next year, then would be the optimal time to start thinking about some of the financial engineering strategies you have put out.

Maybe by mid '10 the credit markets will have loosened up a bit more than they have so far. I see that the larger E&P companies (El Paso, PetroHawk, to name 2) have been able to get debt placed recently but it has come at a fairly high cost, about the same rate of interest that END is currently paying on its convertible notes.
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