Bearcatbob / Maxx
Don't know anything about Beau, but I have (unfortunately) a position in Maxx. Things seem to have turned bad there, and remarkably quickly, too. Yes, production was up y/y in Q2 -- but down from the '97 exit rate and from Q1. Cash flow is down, but that's not too unusual. The really scary thing is how the debt has gotten out of hand. I saw one analyst commentary saying that debt was 4.8x their '98 cf est. Current debt is on the order of $70 million. With production strongly weighted toward oil (80+%), cash flow is unlikely to recover enough in the near term to improve the situation. They have assets on the block, like so many others right now.
I'm keeping my position, at least for now, because they are trading at a tremendous discount to NAV, so they should be an appealing takeover target for someone. At YE '97, they had 26.6 million boe of reserves on a proven + 1/2 probable basis; at the current share price, the market is valuing those at about $2/boe. That's a very "back of the envelope" figure, of course, as they certainly won't still have 26 million boe at $13 WTI, but it's suggestive of a deep discount nevertheless. |
