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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: geneve who wrote (93540)	11/14/2007 9:02:36 AM
From: KyrosL	Respond to of 206184

I wish I knew. Unfortunately I am not enough of an oil/gas expert to judge their reserves. They are 62% NG, 38% oil. They claim a NAV of around $4 a share when I called IR a couple of months ago. The latest book value is a bit more than $4 a share. Their funds from operations (cash flow before capital expenses) is running at $1.3 a share. Their payout ratio based on a 6 cents per share monthly distribution was 55% in the latest quarter, an improvement over the last few quarters. They stopped paying the distribution in October of the current quarter to pay down debt, probably because the banks decided not to renew a $40 million loan due Nov 20. Next week's CC, where they discuss the fate of that loan among other things, is crucial. You may want to wait till then, although that may miss a possible bargain basement price that may develop today and in the next few days. Their financials are here: enterraenergy.com

To: geneve who wrote (93540)	11/14/2007 10:11:23 AM
From: KyrosL	Read Replies (1) \| Respond to of 206184

Here are some of my thoughts on the bank loan due Nov 20, which is the key reason why ENT stopped the distribution and crashed. I am guessing ENT expected to renew the $40 million loan. Then the credit crisis hit in August, and banks informed ENT they won't renew. Note that the credit crisis in Canada such as banks refusing to renew loans, commercial paper market disappearing, etc. has been just as bad as in the US. ENT started panicked negotiations, and the banks demanded an immediate stop to the distribution just to keep talking. ENT put some "non-core" assets on sale to raise money for the loan, just in case, while continuing bank negotiations. The CFO, who was in a way responsible for the mess (though the credit crisis was not his fault) resigned. So did the COO of the US operations, where some very bad flooding in Oklahoma affected adversely results in July and August (see this quarter's report). Bids for the non-core assets were due Oct 18. The offers were probably not very good -- everybody smelled a fire sale. ENT probably figured the cash flow from those mostly oily assets was too sweet to give up, especially with oil hitting new highs. So, they did not announce any sales, and concentrated on the bank negotiations. Meanwhile the chairman of the board and some directors resigned, the CEO announced his retirement next year, probably over disputes about how the trust will operate in the future: remain a trust, convert to a corporation, or put itself up for sale. Also somebody needed to be held responsible for the precipitous fall from $26 to $1 and change in two years. Some resolution to this drama is due on Nov 21st. In the meantime, one can buy oil and gas at half price or less, provided the company does not go bankrupt.