LGCY - Legacy Reserves: Common Stock Could Be Worth Zero In Restructuring
A key challenge with Legacy Reserves (LGCY) at the moment is that a restructuring event could make its common equity worth zero or pretty close to it. Based on historical average multiples, Legacy's equity should be worth something. I've previously discussed a potential net asset value of $5 to $7 per share, albeit in a stronger oil pricing environment.
However, at this particular time, it is fairly easy to make a case that Legacy's common equity has minimal value. Legacy's debt is around 4.7x its projected unhedged 2019 EBITDA at $55 WTI oil