24/7 Wall St. » DPTR

Delta Petroleum Sells More Assets (DPTR, XOM)

247wallst — Mon, 26 Jul 2010 13:47:16 +0000

Struggling oil and gas producer Delta Petroleum Corp. (NASDAQ: DPTR) has agreed to sell $130 million in “non-core assets” to privately held Wapiti Oil & Gas L.L.C. The company plans to use the funds to pay down debt on its senior credit facility.

That’s not all good news. As part of the deal, Delta was forced to cut its credit line to $35 million. Last December, Delta reduced its credit facility from $225 million to $185 million. In Apri,l the company’s borrowing limit was $145 million.

In its quarterly report, Delta included the dreaded “going concern” statement, noting that it “does not currently have the capital on hand necessary to repay its credit facility borrowings due on January 15, 2011 or develop its properties at the pace desired based on current commodity prices.” Since that filing, on May 10th, Delta’s shares have fallen 57%, from around $1.40/share to $0.80.

Delta had entered an agreement with Opon International LLC to sell a 37.5% working interest in Delta’s Vega Area asset in the Piceance Basin to Opon for $400 million. Unfortunately for Delta, the deal was called off in early July when Opon failed to secure financing. The deal was never popular with investors, who sent Delta’s shares down 18% on the day it was announced.

Delta’s problems really started when the company took a $50 million charge in the third quarter of 2009 due to a dry hole in the Columbia River Basin. The stock fell to a 52-week low in December before Exxon Mobil Corp. (NYSE: XOM) announced its purchase of XTO Energy for $40 billion. That breathed new life into all natural gas stocks, including Delta, which jumped more than 20%. But the company’s lack of cash and its ever-diminishing line of credit weighed too heavily.

Shareholders seem to like the deal with Wapiti, though. At this morning’s opening bell Delta shares shot up nearly 20%. That burst is likely just temporary. The company has very little cash available, less than $10 million at its last quarterly report. Further, a stipulation in its renegotiated credit line allows the company to spend just $28 million on capex in the second half of 2010.

Delta’s remaining assets, mostly in the Piceance Basin, are proved but undeveloped. The cost of developing the assets makes it unlikely that a buyer will come forward unless that buyer is willing to just sit on the assets until natural gas prices rise and make development economically viable.

Today’s euphoria over the sale to Wapiti can’t last.

Paul Ausick

Filed under: Mergers and Buy Outs, Oil & Gas Tagged: DPTR, XOM

What’s Left of Delta Petroleum After the Sale? (DPTR)

247wallst — Thu, 18 Mar 2010 19:48:37 +0000

Delta Petroleum Corporation (NASDAD: DPTR) is one of the top market gainers today on news that the independent oil and gas exploration and development company entered into a non-binding letter of intent for a partial sale. The agreement is with Opon International LLC to sell a 37.5% non-operated working interest, in the Vega Area assets in the Piceance Basin. The total consideration was $400 million, but this was larger than the company’s entire market capitalization.

If you want to know why the stock is not up even more, it is because the ‘value’ is not able to entirely be put back to holders. Delta said that it expects $225 million of the total consideration to be used to fund the development of the Vega Area over the next three years. On top of that, there is a stock transaction here. Delta agreed to issue open warrants to purchase 13.3 million shares of Delta common stock at $1.50 per share and then for 5.7 million shares at $3.50 per share, upon closing of the deal. In short, there is going to be some share dilution here. Dilution at lower prices.

Delta also noted that it intends to use the rest of the total consideration for its balance sheet obligations and general working capital purposes. Enough of telling the news. Delta has divested some of its non-core property interest. What we really want to see is what else the company has up its sleeve. Its full list of properties is here and we wanted to look into these. Just keep in mind that these are listed as 2008 levels, so some may be different and some or portions of some may have been divested.

Filed under: Cult Stock, Mergers and Buy Outs, Oil & Gas Tagged: DPTR

A Flood Of Energy M&A: Schlumberger Buys Smith For $11 Billon

247wallst — Sun, 21 Feb 2010 18:43:02 +0000

The acquisition by Schlumberger Ltd. (SLB) of competitor Smith International Inc. (SII) for $11 billion could be another sign that mergers and acquisitions in the energy sector will pick up in 2010. This is the second big deal in the oilfield services sector, following last August’s announcement by Baker Hughes Inc. (BHI) that it would buy smaller rival BJ Services (BJS) for $5.5 billion.

Under the terms of the agreement, Smith shareholders will receive 0.6966 shares of Schlumberger in exchange for each Smith share. Based upon the closing stock prices for both companies on February 18, 2010, the agreement places a value of $45.84 per Smith share, representing a 37.5% premium. Upon closing, and reflecting the issuance of new Schlumberger shares, Smith stockholders collectively will own about 12.8% of Schlumberger’s outstanding shares of common stock.

Schlumberger expects to realize incremental pretax synergies—after integration costs—of aabout $160 million in 2011 and about $320 million in 2012. Schlumberger expects the combination to be accretive to earnings per share in 2012.

Exxon Mobil Corp.’s (XOM) proposed buyout of XTO Energy (XTO) for about $40 billion provides another example of M&A activity in the energy industry. Are there other deals lurking that will change the shape of the industry in the coming year?

Some rumors have surfaced that could prove out or could just be a waste of ink and pixels. What follows are some of the better possibilities.

Conoco Phillips (COP) might be the best bet among the big oil companies to forge a deal. Possible partners include Anadarko Petroleum (APC), Apache (APA), Devon Energy (DVN), and Marathon Oil (MRO). The three primarily exploration and production companies may be too rich for ConocoPhillips, but Marathon, with its large holdings of refineries, may be a decent fit with the fifth-largest refiner in the world.

Refining in the US is a nasty business right, with non-existent margins and low capacity utilization. US demand for refined fuels was dampened during the price run-up of 2008, and has never really come back. But if ConocoPhillips and Marathon could either spin-off or sell outright their combined refining operations, the more streamlined company could be a solid player in E&P going forward.

The most active areas for exploration and development in the US these days are the unconventional gas plays, particularly the shale deposits such as the Marcellus Shale in the Appalachians, the Bossier Shale in Texas and Louisiana, and the Eagle Ford Shale in south Texas.

Thanks to horizontal drilling techniques, shale gas flows quickly hit peak flows. Conventional gas wells ramp to peak flows much more slowly. St. Mary Land & Exploration (SM) drilled a vertical well in the Haynesville Shale play that produced an initial flow of 1.9 million cubic feet per day. Goodrich Petroleum (GDP) completed a horizontal well in the Haynesville that flowed at an initial rate of 12.2 million cubic feet per day. This kind of production is what makes shale gas plays so attractive.

One company that has made a substantial number of deals with its natural gas deposits is Chesapeake Energy (CHK). The company has raised about $11 billion in the past couple of years either through sales or partner agreements. One good possibility for another Chesapeake partnership is St. Mary, which holds leases and options on 225,000 net acres in Eagle Ford and a joint venture with Anadarko that includes another 66,000 acres.

Another possibility for Chesapeake is Pioneer Natural Resources Inc. (PXD), which recently announced that it is seeking bids for a partner to develop its holdings in the Eagle Ford play. Chesapeake has ceded first rights to a partnership in Eagle Ford to France’s Total SA (TOT) as part of an earlier partnership agreement. Pioneer holds 310,000 gross acres in the Eagle Ford play. The company holds proved reserves of 899 million barrels of oil equivalent, 98% of which is in the US.

Colorado-based Delta Petroleum (DPTR) has had its ups and downs in the past year, and has already announced that it is seeking “strategic alternatives”, including selling the company. The company’s market cap is around $400 million and it holds long-term debt as of September 30, 2009, of about $567 million. Cash flow from operations was negative in the third quarter of 2009, and the company had just $5 million in cash. Though not a shale play, Delta holds leases in Colorado’s gas-rich Piceance Basin.

Goodrich Petroleum with a market cap near $800 million and substantial acreage in the Haynesville and Eagle Ford plays also presents an opportunity for acquisition. The company’s proved reserves at the end of 2009 totaled about 421 billion cubic feet equivalent, 99% of which is natural gas.

A larger company that gets some attention in M&A chatter is Petrohawk Energy Corp. (HK). This is a larger deal, though, because Petrohawk has a market cap near $7 billion. The company is all over the Haynesville Shale and holds leases on some 225,000 acres in Eagle Ford.

Finally, Range Resources Corp. (RRC), with a market cap of about $8.5 billion, is heavily invested in the Marcellus and Barnett shale plays. But with a forward P/E ratio of over 60, the company may just be too rich for a potential buyer. But it’s not impossible to envision a joint venture or two with a company like Devon, which expects to recover 11 billion cubic feet equivalent per well in the core of the Cana Woodford shale play in Oklahoma.

The action in the energy business these days is virtually all in the natural gas shale plays. Exxon’s acquisition of XTO started the charge, and further consolidation is almost certain.

Paul Ausick

Filed under: Mergers and Buy Outs, Oil & Gas Tagged: APC, BHI, BJS, CHK, COP, DPTR, DVN, GDP, HK, MRO, PXD, RRC, SII, SLB, SM, TOT, XOM, XTO

Top Day Trader Alerts (SONC, DPTR, NLST, CIEN, NICE, BZH)

247wallst — Wed, 06 Jan 2010 13:59:50 +0000

These are this morning’s top day trader and active trader alerts with links to each story for more detailed analysis and data:

Sonic Corp. (NASDAQ: SONC) is down over 10% on poor earnings.

Delta Petroleum Corp. (NASDAQ: DPTR) is trying for a third-day rally.

Netlist Inc. (NASDAQ: NLST) is up over 5% ahead of an investor presentation next week.

CIENA Corp. (NASDAQ: CIEN) is trying for a day-two rally on yesterday’s rumors.

NICE Systems Limited (NASDAQ: NICE) is up over 4% after a Cramer tout for 2010 anti-terrorism stocks for 2010.

Beazer Homes USA Inc. (NYSE: BZH) is down over 9% on raising cash.

You are invited to join our free daily email distribution list to hear about ongoing day trader and options trader alerts, analyst upgrades and downgrades, stock and market rumors, Buffett and guru investor news, M&A and IPOs, and more.

JON C. OGG

Posted in Pre-Market Activity, Trading Alert Tagged: BZH, CIEN, DPTR, NICE, NLST, SONC

Top Day Trader Alerts (AOB, DPTR, ETFC, C, FNM, FRE, AIG)

247wallst — Tue, 22 Sep 2009 13:02:13 +0000

These are this Tuesday morning’s top day trader alert stocks and actively trade stocks. We have more detailed price and volume analysis and data on each stock with links provided through at VSInvestor.com:

American Oriental Bioengineering Inc. (NYSE: AOB) is down after Asensio.com panned some issues inside the company. Delta Petroleum Corp. (NASDAQ: DPTR) is trading fairly well considering its 45% drop yesterday. We are seeing much trading interest in the return of the junk-financial stocks. E*TRADE Financial Corporation (NASDAQ: ETFC) is up another 4% pre-market and taking out near-term resistance. Citigroup, Inc. (NYSE: C) is up after Singapore lightened its share ownership stake.

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are even hitting September highs. If you want proof that the financial risk trade is coming back on, even American International Group, Inc. (NYSE: AIG) is up over 10% and over $50.00 this morning and challenging those late August highs.

You can join our open email distribution list which goes out several times per week for top day trader alerts, analyst upgrades and downgrades, IPO’s, key secondary offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG

Posted in After-Hours Activity, Financial Stocks, Pre-Market Activity, Trading Alert Tagged: AIG, AOB, C, DPTR, ETFC, FNM, FRE

Top Day Trader Alerts (DPTR, AMGN, PER, DELL, LEN, POT, MOS)

247wallst — Mon, 21 Sep 2009 13:14:05 +0000

These are this Monday’s top day trader and active trader alert stocks in the pre-market. We have more details on each for volume and price moves at VSInvestor.com:

Delta Petroleum Corporation (NASDAQ: DPTR) is getting whacked and battered today on poor well results. It was a very bad weekend as shares are down 35%.

Amgen Inc. (NASDAQ: AMGN) is up over 2% and actually close to 52-week highs on positive study data.

Perot Systems Corp. (NYSE: PER) is up huge by 65% or more, but traders are selling as this is a huge premium and above what many would have expected. Dell Inc. (NASDAQ: DELL) is going to be accused of overpaying.

Lennar Corp. (NYSE: LEN) is down 4% on somewhat active volume after posting wider losses.

Potash Corp. of Saskatchewan (NYSE: POT) is down almost 5% and not as much as it could have been… Lower guidance is hurting shares, look at Mosaic Co. (NYSE: MOS) on this one as well.

JON C. OGG

Posted in After-Hours Activity, Pre-Market Activity, Trading Alert Tagged: AMGN, DELL, DPTR, LEN, MOS, PER, POT

Top Day Trader Alerts (ARIA, DPTR, ETFC, FSLR, MOS, POT, SLXP, S)

247wallst — Mon, 14 Sep 2009 12:58:24 +0000

These are this Monday’s top day trader alert and active trader alert stocks. We have more color and more detail on price and volume analysis linked through to each at VSInvestor.com:

Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) is one of the top gainers, up 15%… on positive study data.

Delta Petroleum Corporation (NASDAQ: DPTR) is down almost 8% and should be an active stock like it was last week.

E*Trade Financial Corporation (NASDAQ: ETFC) is up over 5% on an Citi call to “Buy” shares.

First Solar, Inc. (NASDAQ: FSLR) is down over 3% on an analyst cut to Sell.

The Mosaic Company (NYSE: MOS) and Potash Corp. of Saskatchewan (NYSE: POT) are both getting clipped on a key analyst downgrade this morning.

Salix Pharmaceuticals Ltd. (NASDAQ: SLXP) is the biggest gainer this morning with a 50% gain on its key IBS study results.

Sprint Nextel Corp. (NYSE: S) is rallying over 20% on word of a Deutsche Telekom (NYSE: DT) bid coming. Here wwe noticed the stock is close to resistance, assuming the normal trading takes over after the jump up.

You can join our open email distribution list which goes out several times per week for top day trader alerts, top analyst upgrades and downgrades, IPO’s, key secondary offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG
SEPTEMBER 11, 2009

Posted in After-Hours Activity, Pre-Market Activity, Trading Alert Tagged: ARIA, DPTR, ETFC, FSLR, MOS, POT, S, SLXP

Oil & Energy Players Raising Cash (DPTR, HEP, RRC, SGY)

247wallst — Wed, 06 May 2009 13:11:23 +0000

We are starting to see more and more of the second-tier and third-tier energy players and oil and gas players either file for secondary offerings or actually sell shares in public offerings. Delta Petroleum Corporation (Nasdaq: DPTR), Holly Energy Partners (NYSE: HEP), Range Resources Inc. (NYSE: RRC), and Stone Energy Corporation (NYSE: SGY) are among these, and this is just the ones with news since May 1, 2009.

Delta Petroleum Corporation (Nasdaq: DPTR) has commenced an underwriting for 70,000,000 shares of common stock via JPM, BMO, DB. Tracinda Corporation and another large holder have agreed to purchase $90 million worth of the offering; and Delta Petroleum will make net payments of at least $70 million to retire debt obligations under its credit agreement and the rest is for working capital. This offering is intended to replace the previously announced convertible preferred stock rights offering.

Holly Energy Partners (NYSE: HEP) priced a public offering of 2,000,000 common units of limited partner interests at a price of $27.80 per common unit via Goldman Sachs and UBS.

Range Resources Inc. (NYSE: RRC) filed a very small offering on behalf of a selling shareholder, so none of the proceeds will go to the company. The filing was for 373,623, which at the time was listed as being worth just under $15 million at the time of the filing.

Stone Energy Corporation (NYSE: SGY) has filed a mixed shelf securities offering for up to $500,000,000 of any combination of Debt Securities, Common Stock, Preferred Stock, Warrants, Guarantees of Debt Securities, Rights, Units, and Depositary Shares. The offering notes that Stone Energy Offshore, L.L.C acts as guantor.

JON C. OGG

Posted in Oil & Gas, Secondary Offering Tagged: DPTR, HEP, RRC, SGY

The 52-Week Low Club (GNW)(UIS)(SRZ)(GGP)(KOOL)(DPTR)

247wallst — Fri, 07 Nov 2008 15:49:38 +0000

Genworth (GNW) DIvidend cut. Drops to $2.55 from 52-week high of $28.21.

Unisys (UIS) No news but falls over 30% to $.79 from 52-week high of $7.90.

Sunrise Assisted Living (SRZ) Large quarterly loss. Falls to $1.82 from 52-week high of $34.87.

General Growth (GGP) Analayst downgrade still hurting. Falls to $1.91 from 52-week high of $51.24.

THERMOGENESIS (KOOL) Product recall and quarterly loss. Falls to $.44 from 52-week high of $2.25.

Delta Petroleum (DPTR) Offer to buy company falls through. Stock off to $3.89 from 52-week high of $28.37.

Douglas A. McIntyre

Posted in HI/LOW Tagged: DPTR, GGP, GNW, KOOL, SRZ, UIS

52-Week Lows (August 27, 2007)

247wallst — Mon, 27 Aug 2007 15:00:35 +0000

Not all of these are low closes but these hit new 52-week lows if not……

Candela (CLZR) keeps hitting the list….

Carmike Cinema’s (CKEC)…if movies hit $4 Billion and they can’t make money then they better jack up thge popcorn prices…..

Chico’s F A S (CHS) put in a new 52-week low intraday, although this sub-$17.00 marks a low if it closes here.

Delta Petroleum (DPTR) may not be a 52-week low close but that was intraday.

Eagle Test Systems Inc. (EGLT) is on that seems to keep hitting the list of late.

Franklin Electric Co., Inc., (FELE)…groundwater and fuel pumping systems… isn’t that supposed to be a hot area???

St. Joe Co. (JOE)…. would you expect anything else from a company that builds small communities and transplant-a-marsh to a town player in this housing and loan environment???

Kellwood (KWD) isn’t selling enough men’s and women’s sportwear?

Neurocham (NRMX)… today’s biotech implosion

Restoration Hardware Inc. (RSTO)… needs to restore itself maybe. Too bad, because it’s a neat shop. If houses aren’t selling and if money gets tight, this one can easily be avoided.

Jon C. Ogg
August 27, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.