Thursday, February 20, 2014

Seeking Alpha: Lightstream Resources: A Different Sort Of Oil Play

I've spent a fair bit of time over the past couple of months highlighting oil and gas companies, mostly operators in the Niobrara and Bakken areas, that I feel have been overly punished by the market. Then there is the Lightstream Resources (OTCPK:LSTMF) (LTS.TO) situation. Not unlike Forest Oil (FST), I think years of mismanagement pushed the company into an undesirable situation, though issues outside of the company's control like Western Canadian Select (or WCS) differentials haven't helped.

Relative to long-lived value estimates like NAV and short-term metrics like EV/EBTIDA, Lightstream does not leap out as a huge value. Moreover, the company has work to do in cleaning up its balance sheet. With that heavy debt load, I cannot say that the recently-lowered dividend is entirely safe, though the yield definitely sweetens the potential expected return. If Lightstream can do a good job of selling assets in what is a buyer's market and delivers good drilling results in Swan Hills, there could be some upside here yet.

Read more here:
Lightstream Resources: A Different Sort Of Oil Play

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