Author Topic: PWE - Penn West Petroleum  (Read 441897 times)

Cardboard

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Re: PWE - Penn West Petroleum
« Reply #1240 on: February 01, 2018, 10:41:15 AM »
All $CAD.

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SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1241 on: February 01, 2018, 11:45:14 AM »
"And rising further if the proceeds are reinvested in additional drilling."

They did not receive any proceeds from that sale. They simply ceded $25 million of discounted decomissioning liabilities payable over something like 40 years.

Not saying that getting rid of a money losing asset is not beneficial but, again, please say what is truly going on.

Obsidian is getting interesting around here but, consider also the competition such as CPG and CJ for your hard earned dollars.

Cardboard

Our bad, we misread a communication from another source.

Of course, the transferred liability is the PV of future enviro and regulatory costs associated with these assets; but eliminate the requirement, and you also save this years allocated capex on those now 'sold' assets. Per the 2018 Peter & Co Conference Deck, p6, OBE has a total 10M of enviro and 14M of regulatory capex budgeted this year. Pure speculation, but if just 10% of the budgeted 24M had been allocated to these assets - the cash saving is enough to drill another 1-2 wells in the Cardium that currently average around 700 boe/d. Effectively, they just received 'proceeds' another way.

SD


Joe689

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Re: PWE - Penn West Petroleum
« Reply #1242 on: February 08, 2018, 12:48:18 PM »
Definition of value trap?   We are now under a quarter of book value.  Oh and book value will increase in a month or less in very high likelihood.  Then maybe 15% of book value.    Oh and pretend if we only have 1 core, the Cardium,  we have 70 million in free cash flow per year with 5% declines.    Well I bought more.  Sigh


Pelagic

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Re: PWE - Penn West Petroleum
« Reply #1243 on: February 09, 2018, 10:18:27 AM »
This is a frustrating one. Earnings come out around the first week of March which should be pretty good based on their drilling activity in Q3 and Q4 and moving some of 2018s budget into Q4. Their announcement a few weeks ago of drilling success was certainly encouraging. What I find most frustrating is the vast majority of negative sentiment toward OBE is based on its 2018 hedges taking away the upside from the recent oil increase and yet now oil drops 10% and OBE gets slaughtered (along with the rest of the market). On the bright side, it'll probably break a 52 week low today and just getting back to where it was two weeks ago is a 50% return. Added a little today but trying to preserve some cash for other opportunities.

A decent amount of insider buying in the last couple weeks as well.

Joe689

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Re: PWE - Penn West Petroleum
« Reply #1244 on: February 13, 2018, 11:36:39 AM »
IR says expect additional hedging for 2019, and the details will be with earnings in early March.    I suspect we got some pretty good hedges when oil rallied to $67.    In the end, the hedging will work out fine for us, letting our company focus on operations.  Nothing can really stop us from growing for the next 2 years.  Looking forward to reserve report with additional bookings for Mannvile, Viking, and waterflood Cardium.

Still betting that oil equities will close the gap they opened with WTI.   And looks like Canada will finally have to face this pipeline issue front on.

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1245 on: February 22, 2018, 04:34:07 PM »
Very nice reserve numbers!
Proven (PDP NPV), net of debt, of $CAD 1.50/share
Proven and probable (2P NPV), net of debt, of $CAD 2.60/share
Estimated 16% reserve decline over the next 3 years

https://www.obsidianenergy.com/press-releases/obsidian-energy-ltd-announces-new-chairman-of-the-board-of-directors-126-percent-reserve-replacement-conference-call-details-to-discuss-its-year-end-2017-results/
https://en.wikipedia.org/wiki/Proven_reserves

At the Dec-31-2017 exit rate of 31,700 boe/d - the 16% estimated 2018 decline is 5072 boe/d (0,16 x 31700)
We already have the WG 4 Pad adding 2800 boe/d Jan-03, the WG primary pad adding 1400 boe/d mid-Feb, and PCU-9 adding 2100 boe/d from Apr (with another 700 possible from the last spot on the pad). We have already MORE THAN recovered the estimated 2018 decline. Any new production results from the Jan-15 announcement, onwards - go straight to production growth.

https://www.obsidianenergy.com/press-releases/obsidian-energy-announces-full-year-2017-production-above-guidance-provides-operational-update/

Nice to see.

SD




Joe689

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Re: PWE - Penn West Petroleum
« Reply #1246 on: February 23, 2018, 09:13:18 AM »
Looks right and good to me.  Market could care less.  Low volume says it all.  Dead money!   

I would say maybe earnings will be our time but I said that a few times now.  And this one, I have doubts.  The SEC payment, and how they account for the hedge instrument losses.    Not familiar with Canada accounting on those.   If they are MTM then they are ugly....   Losses on legacy assets if they were not already written down.


SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1247 on: February 23, 2018, 09:47:42 AM »
Looks right and good to me.  Market could care less.  Low volume says it all.  Dead money!   

I would say maybe earnings will be our time but I said that a few times now.  And this one, I have doubts.  The SEC payment, and how they account for the hedge instrument losses.    Not familiar with Canada accounting on those.   If they are MTM then they are ugly....   Losses on legacy assets if they were not already written down.

With this RR, a negative earnings headline is actually preferable.
If the activists don't use it to put up a bid, it can only be because they don't have the money.
And if they can't put up a real bid they will not be seen as credible - win, win for everybody.

There's always the real possibility of a big player stepping up, but that risk it's no different to where we are today.
Whatever they offer, will have to be rich enough to outvalue whatever OBE could make on its own by drilling its reserves flat out, as well as a premium if they offer paper (which seems more likely).

SD


 

Joe689

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Re: PWE - Penn West Petroleum
« Reply #1248 on: February 23, 2018, 10:45:54 AM »
Problem is the gap between SP and value.   Almost would have to be private money.   With public money or paper, it does not look good to pay multiples of SP.   Some say the offer would have to be book value, but who would offer 4?  Or 2P is even around 2.50.  Also a rich premium.     

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1249 on: February 23, 2018, 11:12:16 AM »
Problem is the gap between SP and value.   Almost would have to be private money.   With public money or paper, it does not look good to pay multiples of SP.   Some say the offer would have to be book value, but who would offer 4?  Or 2P is even around 2.50.  Also a rich premium.     

OBE has a lot of levers. Our activists either put up 2P+ as the opener, or get laughed off the street.
A paper payer will also be making a strategic buy, and basing the number on the current value of their fields - not 2P.
The obvious pairings are heavy oil producers, using the light oil and condensate as dilutent.

SD
 
« Last Edit: February 23, 2018, 11:15:01 AM by SharperDingaan »