TheStreetSweeper Cautious on Resolute Energy (REN)

August 25, 2016 9:54 AM EDT

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TheStreetSweeper issues a negative report on Resolute Energy (NYSE: REN):

*2Q report touts average daily oil production improved to 11,865 barrels. What wasn't announced is the average is below the previous two years daily average.
*Junk-rated REN gets downgraded by Standard & Poors in February, adding further pressure to the debt-riddled company.
*Company conducts a June reverse stock split ... always an ominous action.
*Soon after the reverse split, former REN underwriters line up to rate the stock, as if looking for a chance to manage the next offering. Wunderlich boosts its July price target twice in the last two weeks.
*REN is selling assets, enduring dropping cash reserves, mounting liabilities and anticipating up to $70 million in lease expenses this year.
*The stock rose under a recent crude oil rally.
*Oil prices dropped on Wednesday, Aug. 24, the same day REN filed notice that the only CEO the company has ever had is retiring.
*REN shares appear positioned for a ~70% price drop.

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