AOK 0.00% 1.7¢ austex oil limited

Good luck to all holders and Merry Christmas. While all eyes are...

  1. Dis
    3,746 Posts.
    Good luck to all holders and Merry Christmas.

    While all eyes are on the oil price, wishing for a reversal; I see few people commenting on the debt. There is a huge amount of toxic debt in this sector - it will become exposed when the hedges terminate in 2016 and the reserves get recalculated. Best case scenario will be an orderly recap (read : dilution). Worst case will be a sub-prime type debt crisis.

    AOK is well placed in this regard - one of the few with net cash in the bank, and net +ve cash flow (as long as they are not drilling). I doubt it will escape unscathed but will (relatively) fare better than most US based oilers.

    But better yet to stay out and re-enter when the dust settles. IMHO.
 
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