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Pegulas to buy energy business


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18 minutes ago, Jauronimo said:

Par is $10.  Its a special purpose acquisition company (SPAC).  They formed a public company with the stated purpose of acquiring or merging with a company in the energy space.  Pegs has 2 years to make a deal or return everyone's capital.   

 

Every SPAC initially trades at $10 and there is little share price movement until deal is rumored or definitive agreement is in place. 

Pegula made his billions buying oil and has producing acreage and developing this acreage.  Raising capital, assessing investments, and closing deals is a different sport.

 

He’s very qualified in the oil and gas industry. It’s totally worth the risk to invest in Pegs. I think Terry has said they aren’t looking immediately at undeveloped acreage projects. They want cash flow from wells already in production. The problem is, I haven’t seen very many of those kind of assets for sale within PA. There looks to be some for sale just north of State College. It’s good he’s going after cash flow generating projects initially. I’d like for them to get established and maybe even offer a small dividend to their investors. 

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22 minutes ago, Jauronimo said:

Par is $10.  Its a special purpose acquisition company (SPAC).  They formed a public company with the stated purpose of acquiring or merging with a company in the energy space.  Pegs has 2 years to make a deal or return everyone's capital.   

 

Every SPAC initially trades at $10 and there is little share price movement until deal is rumored or definitive agreement is in place. 

Pegula made his billions buying oil and has producing acreage and developing this acreage.  Raising capital, assessing investments, and closing deals is a different sport.


It’s a blank check corporation so there wasn’t the need for much detail in the prospectus

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Just now, Mr. WEO said:


He didn’t “buy low” before.  He started an extraction company.  He wasn’t an investor. 

 

But he has years of experience with all the economic phases of oil and gas. Why would he buy back in if he didn’t think he could provide ROI for his investors? 

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1 minute ago, IronMaidenBills said:

 

He’s very qualified in the oil and gas industry. It’s totally worth the risk to invest in Pegs. I think Terry has said they aren’t looking immediately at undeveloped acreage projects. They want cash flow from wells already in production. The problem is, I haven’t seen very many of those kind of assets for sale within PA. There looks to be some for sale just north of State College. It’s good he’s going after cash flow generating projects initially. I’d like for them to get established and maybe even offer a small dividend to their investors. 

So is Jim Hackett.

 

https://www.chron.com/business/energy/article/Bankrupt-Alta-Mesa-assets-sold-for-320M-15013022.php

Just now, Mr. WEO said:


It’s a blank check corporation so there wasn’t the need for much detail in the prospectus

ok...Clearly I know what a blank check company is.  What was your point that share price was "down to $10"?

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1 minute ago, Jauronimo said:

 

These companies, just like Chesapeake Energy had massive amounts of debt. Pegs doesn’t over leverage his companies. He’s smart with his asset management. Initially he’s going for wells that are already in production that are generating free cash flow. 

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4 minutes ago, IronMaidenBills said:

 

But he has years of experience with all the economic phases of oil and gas. Why would he buy back in if he didn’t think he could provide ROI for his investors? 

 

Maybe he will put some money into his own flagging fuel extraction company.

 

4 minutes ago, Jauronimo said:

So is Jim Hackett.

 

https://www.chron.com/business/energy/article/Bankrupt-Alta-Mesa-assets-sold-for-320M-15013022.php

ok...Clearly I know what a blank check company is.  What was your point that share price was "down to $10"?

 

I didn't mean to suggest otherwise.

 

As for the $10, I was asking at the time that, since a share was cheap, was anyone backing their 'trust" in this venture's success with their own money.

 

1 minute ago, IronMaidenBills said:

 

These companies, just like Chesapeake Energy had massive amounts of debt. Pegs doesn’t over leverage his companies. He’s smart with his asset management. Initially he’s going for wells that are already in production that are generating free cash flow. 

 

If the assets looking to sell were generating enough cash flow to be profitable, would they be likely to sell?  And wouldn't he be buying the company and its debt?

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3 minutes ago, Mr. WEO said:

 

Maybe he will put some money into his own flagging fuel extraction company.

 

 

I didn't mean to suggest otherwise.

 

As for the $10, I was asking at the time that, since a share was cheap, was anyone backing their 'trust" in this venture's success with their own money.

 

 

If the assets looking to sell were generating enough cash flow to be profitable, would they be likely to sell?  And wouldn't he be buying the company and its debt?

 

A lot of these companies have become bankrupt and they have to sell these kind of assets. Well hunting is common, kind of like Diversified Oil and Gas. 

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1 minute ago, IronMaidenBills said:

 

A lot of these companies have become bankrupt and they have to sell these kind of assets. Well hunting is common, kind of like Diversified Oil and Gas. 

 

 

 They are only buying assets from companies that are in bankruptcy?

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16 minutes ago, Mr. WEO said:

 

 

 They are only buying assets from companies that are in bankruptcy?

 

I don’t know who they are buying from. It doesn’t sound like they want a merger or taking on other companies stock and debt. They are looking for assets already generating free cash flow. They aren’t immediately looking for undeveloped acreage. It basically sounds like how Diversified Oil and Gas (DGAOF) operates. They may still develop undeveloped acreage at some point, but it appears they are targeting acreage with already producing wells. 

Edited by IronMaidenBills
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1 minute ago, IronMaidenBills said:

 

I don’t know who they are buying from. It doesn’t sound like they want a merger or taking on other companies stock and debt. They are looking for assets already generating free cash flow. They aren’t immediately looking for undeveloped acreage. It basically sounds like how Diversified Oil and Gas (DGAOF) operates. They may still develop undeveloped acreage at some point, but it appears they are targeting acreage with already producing wells. 

 

How much "free cash flow" is being generated by these distressed companies--especially at prices on a steady, years long decline?  Unless they are only buying assets being sold in bankruptcy reorganization or outright liquidation, then they would be acquiring companies and their assets and their debt.

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7 minutes ago, Mr. WEO said:

 

How much "free cash flow" is being generated by these distressed companies--especially at prices on a steady, years long decline?  Unless they are only buying assets being sold in bankruptcy reorganization or outright liquidation, then they would be acquiring companies and their assets and their debt.

 

Again, I’m not sure what they plan on buying. But not to long ago, Diversified Oil and Gas purchased assets from HG Energy (private) that had operating wells. Pegs is looking for private businesses with these same kind of assets. 

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11 minutes ago, Mr. WEO said:

 

How much "free cash flow" is being generated by these distressed companies--especially at prices on a steady, years long decline?  Unless they are only buying assets being sold in bankruptcy reorganization or outright liquidation, then they would be acquiring companies and their assets and their debt.

What if the distressed companies sell all their valuable assets but keep their debt for reasons?

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6 minutes ago, Jauronimo said:

What if the distressed companies sell all their valuable assets but keep their debt for reasons?

 

Im pretty sure they aren’t looking at debt laden companies, but.

 

 

“Generally, in an asset purchase, the purchasing company is not liable for the sellers debts, obligations and liabilities. But there are exceptions, such as when the buyer agrees to assume the debts, obligation or liabilities in exchange for a lower sales price, for example.”

Edited by IronMaidenBills
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1 hour ago, Jauronimo said:

Par is $10.  Its a special purpose acquisition company (SPAC).  They formed a public company with the stated purpose of acquiring or merging with a company in the energy space.  Pegs has 2 years to make a deal or return everyone's capital.   

 

Every SPAC initially trades at $10 and there is little share price movement until deal is rumored or definitive agreement is in place. 

Pegula made his billions buying oil and has producing acreage and developing this acreage.  Raising capital, assessing investments, and closing deals is a different sport.


He didn’t sell a drill to Dutch shell, he sold drilling rights held over significant land assets, that he operated very profitably. The entire industry is about buying land/rights,  discovery,   production  and selling land/rights. They aren’t mutually exclusive.
 

Nati Gas fracking made him a billionaire, not oil  according to the write ups I can find. 

Edited by Over 29 years of fanhood
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Just now, IronMaidenBills said:

 

Im pretty sure they aren’t looking at debt laden companies. 

How?  That is the meaning of distressed and their prospectus says they are looking at distressed companies.  Also, unless they are buying a company worth $300 million or less, debt will be part of the basic deal finance.  They might buy a company with zero debt and day 1 lever it up significantly.  

 

Their prospectus states they are looking for E&P companies with PDP assets and little value ascribed to undeveloped or speculative acreage.  They are also looking to invest in companies which are distressed or have not had access to capital from Wall Street.  It also reads that they may not even make an acquisition in the energy space.  Basically, an investment in ERESU like any SPAC is a bet on their management team that in 24 months they will find an attractive deal and close and a favorable price.  Stop telling us about their strategy like its written in stone.

4 minutes ago, Over 29 years of fanhood said:


He didn’t sell a drill to Dutch shell, he sold drilling rights held over significant land assets, that he operated very profitably. The entire industry is about buying land/rights,  discovery,   production  and selling land/rights. They aren’t mutually exclusive.
 

Nati Gas fracking made him a billionaire, not oil  according to the write ups I can find. 

What does this have anything to do with the post you quoted?

 

Right, because wells produce oil or gas exclusively and not both and no one in the industry uses the term "oil and gas".

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16 minutes ago, Jauronimo said:

How?  That is the meaning of distressed and their prospectus says they are looking at distressed companies.  Also, unless they are buying a company worth $300 million or less, debt will be part of the basic deal finance.  They might buy a company with zero debt and day 1 lever it up significantly.  

 

Their prospectus states they are looking for E&P companies with PDP assets and little value ascribed to undeveloped or speculative acreage.  They are also looking to invest in companies which are distressed or have not had access to capital from Wall Street.  It also reads that they may not even make an acquisition in the energy space.  Basically, an investment in ERESU like any SPAC is a bet on their management team that in 24 months they will find an attractive deal and close and a favorable price.  Stop telling us about their strategy like its written in stone.

What does this have anything to do with the post you quoted?

 

Right, because wells produce oil or gas exclusively and not both and no one in the industry uses the term "oil and gas".

 

I don’t think they are looking to buying a company outright. They are hunting assets. 

 

Im not saying oil and gas as in production from a well. Of course they aren’t producing both, but it could mean he is looking at oil and gas. Chances are he will focus on gas. 

Edited by IronMaidenBills
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2 minutes ago, TheFunPolice said:

So is the consensus that our top 10 richest NFL owner doesn't know how to run his business?

 

 

 

Most of these posters are just bitter environmentalist. There is nothing wrong with wanting renewables, but these people are completely unrealistic. 

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22 minutes ago, IronMaidenBills said:

 

I don’t think they are looking to buying a company outright. They are hunting assets. 

 

Im not saying oil and gas as in production from a well. Of course they aren’t producing both, but it could mean he is looking at oil and gas. Chances are he will focus on gas. 

I work in transaction services in the energy capital of the world dealing almost exclusively with clients in the energy industry.   But thank you for clarifying the tax structure of a transaction for me while ignoring the financing side of the deal.  Also, thank you for clarifying what acreage and leasehold rights are vs barrels of produced crude.  I thought Pegula was just going around buying warehouses full of gas tanks and barrels of oil!!

 

By the way, depending on the formation wells produce oil, gas, gas liquids, and some other less useful ***** all at the same time!  Who knew?  

Edited by Jauronimo
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