The PR came out Friday evening, luckily one could still get out on Monday a.m. for $0.40.
CKM is shutting down operations in Indonesia, they have high fixed costs due to the nature of their offshore setup. At current oil prices, they were basically making zero dollars. They blew millions drilling for new wells and have not much to show for it. They are down to their last shot in Venezuala, and no word yet on what production if any will result there.
In the meantime, they have debt repayments coming due shortly. Since they are not producing, they have no $ to pay. Exxon walked away from their portion of the Indonesian properties, so not likely that any other buyers will step forward at this time. So CKM is stuck. Needless to say they have no discretionary dollars around in order to get another well going. So they are out of ammunition, and in danger of going out of business.
Even the stock is too low now to do any financing. I think CKM had a good thing going, but those in charge did not manage it well. Of course, the oil prices sunk them too, but one must anticipate cycles. They couldn't get drill rigs during the boom, and were spending top dollar at the end of the cycle to drill.
All games are won and lost before they begin, the smart players know how smell out the big wells, how to evaluate properties, when to hedge, when to conserve dollars, etc. I don't believe CKM did a good job in any of these areas.
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