Email from Paulo27 Mar 2020 16:47
Thank you for your note.
Its been challenging on all fronts for everyone.
Business has dried up for me in every respect as well, except for Attis – there’s always something to do there
I have family still in Italy and things are horrendous over there. We’re not taking it seriously enough here in the US. We have a shelter in place in Houston, but that started only today – pretty late for the 4th largest city in the US. No testing kits, no real limitation on the movement of people and then we have that clown on TV not listening to his health experts. I too have hope that things will turn, but we have to give this some time to work itself out.
On top of everything, the oil and associated businesses have been decimated here in town which makes for a pretty somber mood as well.
Regarding Attis, I’m a bit discouraged and disappointed. At these prices, we have to shut in Austin and all of the Attis (non Mayan) assets are a complete disaster. Fort Worth has a large p&a liability overhang and will likely be sold for the assumption of the liability. The service company made sense only if one was expanding in the panhandle area, and as all businesses, it cost money to get it up and running and never got a chance to be a solid business. Zink and Mathis have promise, but we keep being delayed by buyers due to difficulties raising cash. We’re chasing other leads, but I understand its hard to make that investment at this time.
The Saudis / Russians aren’t helping. We’ll see what April supply looks like. There’s a good chance that if the tankers are full and storage is at capacity, we’ll have to shut everything in the US. There will be acquisition opportunities for those willing to take on additional risk and at some point, the economy will turn around. When that happens and we start depleting storage, we should see a spike in oil and gas prices – but that may be a while out
On the merger / RTO I’m hopeful we can do something in the near future, but it’s either going to be a merger in order to survive or wait until after we turn the corner on the virus and oil prices rebound. Not much cash out there for acquisitions
Either way, we’re going to go down to a skeleton crew (board included), keep expenses to the bare minimum and we’ll have to patiently wait, hard as that is.
Thanks again and best of luck.
Stay safe,
Paolo