Ed-
I didn't even listen to the CC but I did look at their presentation materials and I think the CC was an attempt to distract from the reality of their finances. They used 6/30/14 PV-10s, for instance. And, what, acre prices haven't declined?
If they hadn't largely moved away from oil to NG they would be a BK candidate today. Granted, with almost 90% of their production in NG they haven't suffered as much as others.
Nonetheless, they indicate they have only 20% of their 2015 production hedged at $4.09.
So, if NG declines and hedges runoff, they will feel the pinch.
Also, they are girding for it by closing three regional offices and cutting capex
In short, while Evans is highly regraded, a prolonged commodity downturn will bite them on the ass.
I owned a healthy slug of both the Cs and Ds but I bailed them last year in the 40s and 30s for an unexpected loss. Importantly, last week the 9.75%s barely budged after the CC (now around 70-72). As you know, I hold the credit guys in far higher regard than the stock jockeys and pfd players. Seems they didn't buy the CC schtick. Ergo, I would sell the recent price move in the Ds and believe that new lows will be seen. |
