Josef Schachter Long Run Exploration LRE-T TOP PICK Apr 06, 2015

At these energy prices and the earnings this company is making, it is very difficult to forecast successfully that it will survive. If he owned it, he would continue to sit on it and cross his fingers.

Got themselves into a pickle in terms of debt heading into a collapse of crude price. Debt to cash flow is 4.6 times so they are getting up there. Has not owned it in 2 years. If you believe in $70 oil this name could double, but at $65, no. They could potentially sell some assets.

Doesn’t like this. It is one of those companies that was acquisitive and used a lot of debt. It hasn’t played out well. There are not a lot of buyers out there and they have the ability to be very picky. This one is probably being run by its bankers at this stage.

She would call this a Sell right now. This is not the right environment now for a company like this. Unfortunately they implemented a dividend when they had too much debt and when commodity prices were in a correction. Dividend was unsustainable so they had to get rid of it.

Debt to cash flow is around 6X, which is high. Cut the dividend to zero, which led to a freefall in the stock. If you were an uber bull on oil, this is the type of name that could go up several fold. Personally it is not his strategy because he thinks he can make 50% or more buying more established names. Higher risk than what he would be comfortable with. In his estimation, they are unable to grow oil at anything remotely close to today’s oil prices. High debt, declining production, declining product pricing which is a tricky situation to be in.

Is one of the most troubled companies in the business right now. It makes sense to upgrade the company right now. The company had an takeover rumour, which doesn't make sense because the stock is going lower. This indicates that the public doesn't believe in the rumour. Doesn't recommend buying based on the rumour.

(Market Call Minute.) Have a bid from some Chinese investors. The company was going bankrupt were it not for this bid. He would do a happy dance and tender his Stock.

(A Top Pick April 6/15. Down 34.46%.) This is subject to a takeover bid from a Chinese operation.

(Market Call Minute.) Being taken over at not much higher than the current share price. Feels the deal risk is very low and would wait for the deal to finish.

Any danger of the Chinese deal not going through? There is always some risk when talking about foreign buyers. He doesn’t like facing this kind of a deal risk. There are plenty of opportunities without trying to play the arbitrage, etc.