Crossy, Endeavour Int'l (END) -- Overall I agree with you, but I was disappointed to hear that, even after now including Columbus and Cygnus FB I in their cost pool, their DD&A rate for this year will be $20/bbl. ($3.33/mcf). With UK natty prices having finally crashed back down to the low $4 level, this is not an economic enterprise at current commodity prices. Granted, the UK natty futures are showing much higher prices for next winter, but I'm not sure how much I want to depend on that occurring.
Given that UK natty prices have tanked about 40% since the end of last year, unless they rally significantly in the next 2 weeks (most unlikely), END will almost certainly have another impairment writedown for 1Q, and the number is likely to be a lot higher than the impairment for 4Q.
I blew out about a quarter of my position today, and am trying to decide what to do next.
I suppose a year from now, when they include Rochelle in their proved reserves, that may pull down their DD&A rate pretty significantly, but without any info about how much it will cost (all-in) to get Rochelle online, to believe that would be only pure speculation. |
