More pain ahead for Lightstream Resources shareholders
Also: a big change at the top at Renegade Petroleum
When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at email@example.com
by Max Fawcett
It’s been a long and disappointing ride for Lightstream Resources’ (TSE:LTS) shareholders, who have watched as the value of the re-branded company’s shares continue to sink ever downward. And according to a report from AltaCorp Capital’s Don Rawson, they shouldn’t expect things to turn around any time soon. The company announced average production of 45,100 boe/d in its most recent quarter, but that production is substantially gassier than Rawson had been anticipating. That, combined with the company’s continued inability to de-lever its balance sheet (a 2013 estimated debt-to-cash flow ratio of 3.3 times, with an anticipated 2014 figure of 4.1 times) and its refusal to cut its dividend leaves Rawson unexcited about the stock, rating it sector perform and putting an $8 target on it.
Things aren’t looking much better for Renegade Petroleum (TSE:RPL) shareholders, who have watched as the company’s conversion into a dividend-paying junior has been fraught with cost overruns and executional mishaps. As a result , perhaps, the company announced a major shuffle at the top, with Chairman Bud McDonald and CEO Michael Erickson both out on their ears. Analyst Jeremy McCrea doesn’t think that augers particularly well for shareholders, though. “We’ve long argued Renegade has attractive assets that should provide the company with above-average growth. Add in the current low valuation, decreasing leverage profile, and some great initial results from the Queensdale acquisition, and we remain optimistic that the underlying assets should find a suitable buyer. Unfortunately, given the full change in management now, and the lengthening time the strategic review process has been going on for, we are changing our rating to speculative, and lowering our target to $1.50.”