Author Topic: PWE - Penn West Petroleum  (Read 396097 times)

Liberty

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Re: PWE - Penn West Petroleum
« Reply #1320 on: April 05, 2018, 06:02:09 AM »
The idea is to find good things that are temporarily broken. Many other broken things just stay broken...
"Most haystacks don't even have a needle." |  I'm on Twitter  | Watch this, please (new link)


Pelagic

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Re: PWE - Penn West Petroleum
« Reply #1321 on: April 05, 2018, 08:25:40 AM »
Two near term improvements for OBE of late. First, share price has been above $1 for a few days now so hopefully the delisting concerns that initially prompted management to consider a reverse split are behind us - for good perhaps  :-\

Second, WCS differentials have improved so cash flow from the PR property should be better for Q2 and in turn make it worth more in a sale.

I kind of think about value investing as something like 30% analysis, 70% patience. OBE has a valuable asset in the Cardium with as much land as they'll likely ever be able to drill for the next decade. What they lack is cash and a plan to develop it in a way that maximizes value for shareholders. Selling off assets in a rising oil market, or at least a market where equity valuations haven't caught up to the price of oil, isn't ideal. However, if the company can put the proceeds to work by significantly increasing their light oil production then it should work out in the end and they can remain independent. Splitting up the pieces of the company and selling the carcass seems like a missed opportunity to develop their core asset when they'll have the cash to do so.


Joe689

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Re: PWE - Penn West Petroleum
« Reply #1322 on: April 16, 2018, 07:26:29 AM »
Unflattering take out of Spartan (SPE) by VET this morning for 1.4 billion.   Very odd to me that mgmt would accept such a low premium.    Market seems skeptical as well.  Will it not pass vote?  Hoping for another offer?  VET down almost 3% today and deal is for .1476 shares which should be 6.34 SPE PPS.  Smells bad.

This should at least set a floor for OBE in my opinion.  Our enterprise value is around 1B at this point.   Only thing Spartan has on us is the oil ratio & ARO? (having trouble finding it) but we have higher production, lower decline, and more acreage. 


Joe689

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Re: PWE - Penn West Petroleum
« Reply #1323 on: April 18, 2018, 08:30:55 AM »
Anyone care to guess on what we might get for the Viking?  Sale should "conclude" in Q2.

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1324 on: April 18, 2018, 09:14:14 AM »
Most would expect the metrics to be better than they are at SPE. Viking also has the 'now in-service' pipeline with an unrestrained capacity of 12,500 boed/d (of light crude), that isn't subject to the full diffeential. A very valuable strategic asset in the current climate.

Most would also recognize that conclude in Q2 doesn't mean settle in Q2. Our own thoughts are that the sale date will be driven by the outcomes of the upcoming vote. The more time they have to fill that line with their own production, the more they will get for Viking overall. Everybody wins.

SD
« Last Edit: April 20, 2018, 10:21:07 AM by SharperDingaan »

Joe689

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Re: PWE - Penn West Petroleum
« Reply #1325 on: April 18, 2018, 09:39:25 AM »
Yes, > 150M is really needed to execute buyback, debt reduction, and Cardium growth.

This pipelineyou referring to, is it the Gibson line?, as that is not online till Q1 '19.   I know we have a lot of infrastructure there, so is it our pipeline?

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1326 on: April 18, 2018, 02:19:51 PM »
We would prefer to just reference their most recent April 2008 Presentation Deck, p20.
"Infrastructure advantage with key owned and operated gas plants and minimal incremental facility spend"

SD

StevieV

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Re: PWE - Penn West Petroleum
« Reply #1327 on: April 19, 2018, 07:10:45 AM »
The dumb hedging strategy is holding OBE back.  But, the hedges won't last forever, and the WCS differential is rapidly improving.  If we are entering a new phase of $60-$80 WTI (I tend to think we are), and WCS differentials will average something like $14-15 (I think the will, or better if there is good pipeline news or worsening heavy oil supply situation), then OBE is worth significantly more than its current share price.

I am hoping that they will soon announce a new plan with the new board.  More aggressive drilling in the Cardium, higher growth projections, and curtailment of the hedging program.  The sooner the better.