DB:LRTI

Stock Analysis Report

Legacy Reserves

Executive Summary

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States.

Risk Analysis

Has less than 1 year of cash runway

Shares are highly illiquid

Does not have a meaningful market cap (€666K)

Currently unprofitable and not forecast to become profitable over the next 3 years

+ 1 more risk


Snowflake Analysis

Weak fundamentals or lack of information.


Similar Companies

Share Price & News

How has Legacy Reserves's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LRTI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

LRTI

5.9%

DE Oil and Gas

0.3%

DE Market


1 Year Return

n/a

LRTI

87.7%

DE Oil and Gas

13.8%

DE Market

Return vs Industry: Insufficient data to determine how LRTI performed against the German Oil and Gas industry.

Return vs Market: Insufficient data to determine how LRTI performed against the German Market.


Shareholder returns

LRTIIndustryMarket
7 Day0%5.9%0.3%
30 Day0%2.8%1.3%
90 Day0%38.1%5.2%
1 Yearn/a94.0%87.7%17.4%13.8%
3 Year-100.0%-100.0%39.0%27.0%15.9%5.7%
5 Year-100.0%-100.0%342.3%274.4%27.9%10.6%

Price Volatility Vs. Market

How volatile is Legacy Reserves's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Legacy Reserves undervalued compared to its fair value and its price relative to the market?


In this section, we usually try to help investors determine whether Legacy Reserves is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Legacy Reserves has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

  • Take a look at our analysis of LRTI’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • When valuing a company like this, investors focus more on how they perceive the potential returns from the core activities, the size of each contract's opportunity, and the capacity of the team. While we are not analysing this type of data at the moment, if you don’t know where to start, we recommend reading through Legacy Reserves regulatory filings.
  • Explore potentially undervalued companies in the Energy industry.

Future Growth

How is Legacy Reserves forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

6.2%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Legacy Reserves has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Legacy Reserves performed over the past 5 years?

38.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LRTI is currently unprofitable.

Growing Profit Margin: LRTI is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: LRTI is unprofitable, but has reduced losses over the past 5 years at a rate of 38.2% per year.

Accelerating Growth: Unable to compare LRTI's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LRTI is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-5.1%).


Return on Equity

High ROE: LRTI's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Legacy Reserves's financial position?


Financial Position Analysis

Short Term Liabilities: LRTI has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: LRTI has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: LRTI has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: LRTI's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: LRTI has a high level of physical assets or inventory.

Debt Coverage by Assets: LRTI has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LRTI has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: LRTI has less than a year of cash runway if free cash flow continues to reduce at historical rates of -5.9% each year


Next Steps

Dividend

What is Legacy Reserves's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.3%markettop25%3.6%industryaverage5.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate LRTI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate LRTI's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LRTI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LRTI's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: LRTI is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LRTI's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Legacy Reserves's salary, the management and board of directors tenure and is there insider trading?

0.8yrs

Average management tenure


CEO

Dan Westcott (39yo)

0.7yrs

Tenure

US$16,005,385

Compensation

Mr. James Daniel Westcott, also known as Dan, has been the Chief Executive Officer of Legacy Reserves Inc. since March 1, 2019 and has been its Director since March 18, 2019. Mr. Westcott served as the Pre ...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD16.01M) is above average for companies of similar size in the German market ($USD425.50K).

Compensation vs Earnings: Dan's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

0.8yrs

Average Tenure

39yo

Average Age

Experienced Management: LRTI's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.5yrs

Average Tenure

62yo

Average Age

Experienced Board: LRTI's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€952,58413 Jun 19
Baines Creek Capital, LLC
EntityCompany
Shares9,416,540
Max Price€0.10
Sell€50,51913 Jun 19
Brian Williams
EntityIndividual
Shares476,500
Max Price€0.11
Sell€68013 Jun 19
Kevin Tracy
EntityIndividual
Shares7,000
Max Price€0.097
Sell€50413 Jun 19
James Schumacher
EntityIndividual
Shares5,000
Max Price€0.10
Sell€14,90313 Jun 19
Jeremy Carter
EntityIndividual
Shares147,317
Max Price€0.10
Sell€1,164,88112 Jun 19
Baines Creek Capital, LLC
EntityCompany
Shares11,983,512
Max Price€0.097
Sell€861,90011 Jun 19
Baines Creek Capital, LLC
EntityCompany
Shares3,300,000
Max Price€0.27
Buy€48003 Apr 19
Kevin Tracy
EntityIndividual
Shares1,000
Max Price€0.48
Buy€003 Apr 19
Brian Williams
EntityIndividual
Shares1,071,137
Max Price€1.33
Buy€1,11127 Mar 19
James Schumacher
EntityIndividual
Shares2,514
Max Price€0.44
Buy€44,43527 Mar 19
Brian Williams
EntityIndividual
Shares100,000
Max Price€0.44
Buy€66,65327 Mar 19
Baines Creek Capital, LLC
EntityCompany
Shares150,000
Max Price€0.44
Buy€136,50920 Mar 19
Baines Creek Capital, LLC
EntityCompany
Shares300,000
Max Price€0.48
Buy€44,11020 Mar 19
Brian Williams
EntityIndividual
Shares100,000
Max Price€0.44
Buy€11,51714 Mar 19
Baines Creek Capital, LLC
EntityCompany
Shares10,000
Max Price€1.15
Buy€57,58414 Mar 19
Brian Williams
EntityIndividual
Shares50,000
Max Price€1.15
Buy€79,14711 Mar 19
Brian Williams
EntityIndividual
Shares71,137
Max Price€1.18
Buy€83,81606 Mar 19
Brian Williams
EntityIndividual
Shares75,000
Max Price€1.12
Buy€26,28706 Mar 19
Brian Williams
EntityIndividual
Shares25,000
Max Price€1.05
Buy€101,95201 Mar 19
Brian Williams
EntityIndividual
Shares100,000
Max Price€1.02
Buy€110,41527 Feb 19
Brian Williams
EntityIndividual
Shares100,000
Max Price€1.17
Buy€179,34120 Feb 19
Brian Williams
EntityIndividual
Shares150,000
Max Price€1.20
Buy€35,65213 Feb 19
Baines Creek Capital, LLC
EntityCompany
Shares25,000
Max Price€1.43
Buy€195,98313 Feb 19
Brian Williams
EntityIndividual
Shares150,000
Max Price€1.44
Buy€66,71105 Feb 19
Brian Williams
EntityIndividual
Shares50,000
Max Price€1.40
Buy€36,09005 Feb 19
Baines Creek Capital, LLC
EntityCompany
Shares25,000
Max Price€1.44

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.5%.


Management Team

  • Kyle Hammond (58yo)

    President & COO

    • Tenure: 0.7yrs
    • Compensation: US$11.38m
  • Micah Foster (39yo)

    Chief Accounting Officer & Controller

    • Tenure: 7.6yrs
  • Dan Westcott (39yo)

    CEO & Director

    • Tenure: 0.7yrs
    • Compensation: US$16.01m
  • Bert Ferrara (34yo)

    General Counsel & Corporate Secretary

    • Tenure: 0.8yrs
  • Cory Elliott (41yo)

    Chief Information Officer

    • Tenure: 0.8yrs
  • Robert Norris (39yo)

    Chief Financial Officer

    • Tenure: 0.8yrs

Board Members

  • Doug York (57yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$86.00k
  • Kyle Vann (72yo)

    Lead Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$266.00k
  • Bill Granberry (76yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$231.00k
  • Paul Horne (57yo)

    Chairman of the Board

    • Tenure: 3.5yrs
    • Compensation: US$12.56m
  • G. Lawrence (67yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$233.00k
  • Dan Westcott (39yo)

    CEO & Director

    • Tenure: 0.7yrs
    • Compensation: US$16.01m

Company Information

Legacy Reserves Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Legacy Reserves Inc.
  • Ticker: LRTI
  • Exchange: DB
  • Founded: 2005
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: US$665.901k
  • Listing Market Cap: US$602.774k
  • Shares outstanding: 114.81m
  • Website: https://www.legacyreserves.com

Number of Employees


Location

  • Legacy Reserves Inc.
  • 303 West Wall Street
  • Suite 1800
  • Midland
  • Texas
  • 79701
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LGCY.QOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 2007
LRTIDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 2007

Biography

Legacy Reserves Inc., an independent energy company, engages in the acquisition, development, and production of oil and natural gas properties in the United States. It focuses on the horizontal development of unconventional plays in the Permian Basin and the management of shallow-decline oil and natural gas wells in the regions of Permian Basin, East Texas, Rocky Mountain, and Mid-Continent. As of December 31, 2018, the company had proved reserves of approximately 164.9 million barrels of crude oil equivalent covering natural gas, as well as oil and natural gas liquids. Legacy Reserves Inc. was founded in 2005 and is based in Midland, Texas. On June 18, 2019, Legacy Reserves Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/17 22:58
End of Day Share Price2019/08/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.