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LONE - Lonestar Resources: Likely To Be Overwhelmed By Debt Burden And Interest Costs
Lonestar Resources US Inc Com
Lonestar Resources (LONE) has been able to increase production significantly in 2019 and looks poised to at least maintain production in 2020 while generating slight amount of positive cash flow. Its well-level results are solid, but it is severely hampered by its debt, as interest costs add up to 33% of its unhedged EBITDAX at $51 WTI oil. Lonestar's preferred shares could have dividends adding up to another 7% of EBITDAX if they are paid in cash.
The interest burden and modest remaining liquidity makes it likely that Lonestar will need to restructure,