There’s no way to sugarcoat things for investors of Endeavor International (NYSE: END). Despite a small price bump over the past few weeks, the company has recently fallen to a market capitalization of just $150 million. In the past year, shares have plunged from a 52-week high of $13.23 to its recent price of around $3. Ouch. Among the company’s many problems is its heavy debt load of more than $800 million. This has investors scared and some savvy investors see the debt load sinking the shares even further and have sold more than 29% of the company’s shares short.

Why it's hated
While the debt is a concern, it's just one of Endeavor's current storms. Another is that 29% of current production is weighted toward North American natural gas, where profits are being held back by low natural gas prices. Among its oil plays, it’s has 90,500 net acres in the Heath shale of Montana. Haven’t heard of the Heath shale? It was supposed to be the next Bakken, only better because it's shallower. At one time, EOG Resources called the Heath shale the “king of oil plays.” Unfortunately, it hasn’t proved to be very commercially viable as its best wells are just producing limited amounts of oil per day.

Oh, and speaking of storms, one just recently damaged the company’s East Rochelle well and halted operations. With a list this long, no wonder shorts hate this stock. Endeavor appears to be in serious trouble. Or is it?

Why it should be loved
The company has accomplished a lot in the past couple of years. At the end of 2011, it announced the acquisition of ConocoPhillips' interest in three producing U.K. oil fields in the North Sea for $330 million. Together with the rest of its U.K. assets, Endeavor will see growing cash flow from these oil projects. In fact, has been able to sell its U.K. oil production forward in order to raise cash. Even better, this oil is priced at Brent-based crude prices, which trade at a significant premium to the U.S. benchmark WTI.

Because of the strength of these assets, it was able to extend its looming credit facility due date until the middle of 2014. With that near-term credit overhang now past, the company can focus on its operations.

Finally, the company’s board is in the midst of a strategic review, which could result in the company unlocking the significant value of its assets. Among the options are a sale or joint venture of its U.K. assets or a sale of other non-core assets. It is also possible that the whole company is put up for sale, though more value would likely be found through asset sales because of its depressed share price.

My Foolish take
While I can understand why shorts fear Endeavor’s debt, there’s enough positive catalysts to be found at its U.K. assets for shorts to be worried. Further, the strategic review could result in a transaction that sends shares exploding higher. While I’d personally be leery of investing my capital, I certainly wouldn’t short this company given the potential catalysts for a higher share price.