Lightstream Resources hunkers down on production
Lightstream Resources released it's fourth quarter and annual results on March3,2016.And not surprisingly it has reduced it's production from the fourth quarter of 2014 as well as for the entire year 2014 and for 2015.Gradually it has pared down it's production due to the drop in the price of oil.EBITDA has come down for the year and consequently (FFO) funds from operations has dropped also;it has dropped from $570 million in 2014 to $190 million in 2015 and now down to $30 million for this quarter.This has caused Lightstream (LTS) to pare it's capital program down to $12 million for the quarter.So it's capital program will be entirely financed by it's internal funds.
A Defensive Strategy
A few Canadian junior producers have decided to keep an active drilling program but many(like Lightstream) have decided to almost stop drilling in order to put upward pressure on oil prices.Although it is still drilling on one well in the Bakken and one in the Cardium area.There will likely be only money to spend on infrastructure in this quarter.This is a drastic reduction from the 26 wells brought onstream in 2014 in the Cardium area alone.LTS also plans to use it's funds from operations to reduce debt.This will not be seen as a high level of torque to cause LTS prices to rebound with a modest recovery in oil prices. But it will keep the stock price slowly moving up with a slow rebound in oil prices.
A Comparison to Other Juniors
Lightstream was formerly called Petrobakken Resources and yet it has announced to the oil patch that it will sell all or a part of it's Bakken resources at the right price.It is true that the oilfield economics are better in the Cardium and Lightstream has lots of oil bearing acreage.But it is also true that LTS is focussed on reducing debt.It's strategy is different than Twin Butte that will spend on it's 2016 capital program more than it's funds from operations (FFO).Yet the market has not rewarded Twin Butte for it;s more offensive strategy yet.LTS is a conservatively managed stock and has paid in the past for being too risky and taking on too much debt For the time being this is a sensible strategy and LTS share prices will move slowly rather than quickly up to the $.50 to $.60 area by mid 2016.Furthermore this blog predicts that there will be no firesale of huge amounts of Bakken properties and not even an ordinary sale of a large bundle of Bakken properties.
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A Defensive Strategy
A few Canadian junior producers have decided to keep an active drilling program but many(like Lightstream) have decided to almost stop drilling in order to put upward pressure on oil prices.Although it is still drilling on one well in the Bakken and one in the Cardium area.There will likely be only money to spend on infrastructure in this quarter.This is a drastic reduction from the 26 wells brought onstream in 2014 in the Cardium area alone.LTS also plans to use it's funds from operations to reduce debt.This will not be seen as a high level of torque to cause LTS prices to rebound with a modest recovery in oil prices. But it will keep the stock price slowly moving up with a slow rebound in oil prices.
A Comparison to Other Juniors
Lightstream was formerly called Petrobakken Resources and yet it has announced to the oil patch that it will sell all or a part of it's Bakken resources at the right price.It is true that the oilfield economics are better in the Cardium and Lightstream has lots of oil bearing acreage.But it is also true that LTS is focussed on reducing debt.It's strategy is different than Twin Butte that will spend on it's 2016 capital program more than it's funds from operations (FFO).Yet the market has not rewarded Twin Butte for it;s more offensive strategy yet.LTS is a conservatively managed stock and has paid in the past for being too risky and taking on too much debt For the time being this is a sensible strategy and LTS share prices will move slowly rather than quickly up to the $.50 to $.60 area by mid 2016.Furthermore this blog predicts that there will be no firesale of huge amounts of Bakken properties and not even an ordinary sale of a large bundle of Bakken properties.
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