Author Topic: EGC - Energy XXI Gulf Coast  (Read 1965 times)

Foreign Tuffett

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Re: EGC - Energy XXI Gulf Coast
« Reply #10 on: September 19, 2018, 07:49:24 AM »
I agree that it's unclear what's going on here. Maybe Cox is struggling to close on financing?

Cox almost certainly carries significant debt already. It bought properties from Chevron in 2015 and Freeport last year. Both those deals were probably large relative to its size.

EGC is also leveraged via huge asset retirement obligations. So anyone who was playing the merger arb game here was probably already skittish and ready to sell at the first sign of problems.

Might be an opportunity for someone with tener cojones. I'll be on the sidelines.


writser

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Re: EGC - Energy XXI Gulf Coast
« Reply #11 on: September 19, 2018, 08:08:55 AM »
Like RSYS, you want no part of a stand alone EGC IMO. Basically a deepwater SD.

I try not to discard companies outright. Everything has its price. On the positive side, Orinoco proposed a transaction in May (and has filed a complaint against EGC for breaching the term sheet) and after that announcement the stock traded higher than it currently does - with oil prices more or less equal afaik. Maybe that proposal is still on the table if the Cox deal fails (then again, maybe not). This might be worth a shot but I have cojones muy pequeno or whatever - my Spanish being awful.
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writser

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Re: EGC - Energy XXI Gulf Coast
« Reply #12 on: September 21, 2018, 06:39:03 AM »
Interesting price action for sure. After several ~10% down days today the stock opens up ~20% on what I would say is basically some boilerplate press release without any information. After the open it immediately drops 10% and now back to $7.20. Efficient market ..
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: EGC - Energy XXI Gulf Coast
« Reply #13 on: September 28, 2018, 08:32:29 AM »
And back at $8.40. Maybe I'm missing some court filings / other news but I haven't found anything. The price action has been absolutely nuts.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: EGC - Energy XXI Gulf Coast
« Reply #14 on: October 11, 2018, 09:16:52 AM »
An update today:

Quote
Since the merger agreement amendment was signed in early September, Cox regularly provided EGC with detailed status updates, including that definitive documents, including definitive financing documents, are nearly complete. Based on Cox’s status updates, the companies have agreed to extend the required closing date to October 17, 2018.

This extension is not a waiver of obligations under the merger agreement. The closing of the transaction is not subject to a financing condition.

FWIW I think that sounds pretty solid. Price action is still very suspicious though. I couldn't help myself. Bought a few shares.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: EGC - Energy XXI Gulf Coast
« Reply #15 on: October 18, 2018, 06:00:01 AM »
Looks like I dodged another bullet (link).
Quote
EGC previously announced on October 10, 2018 that EGC and Cox jointly agreed to extend the closing date of the merger to October 17, 2018.

EGC and Cox began the closing process at 7:15 a.m. Central Time this morning and expect to complete the merger within the next few hours.

Crazy price action, even today. Premarket low of $7.10 or something. Now trades now at ~$8.95 which is still decent if you think the deal closes soon.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.