gualberto
Charlie don't Surf
Hi, good morning guys. Thanks for taking the questions and providing some pretty open ended answers here. Got a – hopefully, sort of a quick one. Just in terms of a I know that you guys are taking a step back, taking a look at the operations, but just on the financial side of things, you have kind of just a cash balance, which has moved down a little bit. At the same time, you also happen to have the 7.75% senior unsecured notes coming due in 2020, which I think you kind of have to deal with about a year earlier.
Can you help me understand, just in terms of timing, when do you think you will be able to get this company to a point where it’s either actually free cash flow positive or breakeven? Or in a position to address the maturity of those 7.75% notes due 2021?
Tony Sanchez
Well. On the first part of your question is exactly what we are doing right now. Our focus – I’m going to answer this in two parts. Our focus here, barring any asset sales, is to get to free cash flow positive as quickly as possible. So part of the exercise we are undergoing right here with the consulting company I’ve been talking about is how do we – is putting a plan in place to get to cash flow positive as soon as possible and making sure that we have funds and liquidity to do so. So there’s a pretty good plan taking place already and then basically, what it does is it gets our production rates back to where they should be.
And so I think that’s exactly what the focal point is. At the same time, we are, as I have mentioned earlier, we are engaging in multiple processes to sell non-core assets and to rise capital to potentially either take that capital and consolidate UnSub or take that capital and paydown the 2021 bonds or a large portion of the 2021 bonds. So if we were to sell and bring in a good amount of cash, the first probable place that we would put that cash would be to refinance or to buy in and paydown the 2021 bonds.
So that would be – that’s kind of our approach and as I’d largely describe that approach its – we are focused on everything from improved operations to asset sales and debt paydown, all at the same time. And we are undergoing the processes that we’ve talked about publicly at Maverick and Palmetto and when we get a good number, those are non-core assets for us right now. If we get a good number, we will sell it, if we don’t get a good number, we are not going to sell. That has not changed.
And furthermore, we’ve even entertained a couple propositions to sell minority interest at Catarina. That asset has been doing tremendously well. And if that were to come to fruition, we will take some of that capital and delever with it. So – but we are open to any and all balance sheet solutions here, which I think we’ve got a lot of tools to work with here that include a combination of all things I’ve just mentioned. But we want to be very proactive in this.
We are not waiting around until 2020, we are doing it. And I think that in the renewed interest in the Eagle Ford, there’s a lot of interest in good quality-producing assets. And this basin having a lot more running room and having more interest than it did last year and not really being burden with some of the takeaway issues that that other basins are burdened with. So a lot of attractive things about the Eagle Ford, I think, we can capitalize on now.
https://seekingalpha.com/article/41...chez-q2-2018-results-earnings-call-transcript
