Author Topic: PWE - Penn West Petroleum  (Read 482538 times)

Joe689

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Re: PWE - Penn West Petroleum
« Reply #1470 on: June 06, 2019, 09:50:56 AM »
Yet no one is interested whether a corporate buyer or investor.  It is worth noting that the reserve values are based on a inflated WTI price deck by Sproule.  Also Ed Par dif is higher than historical averages.  I'd like to see the reserves valued at a flat 55 wti and using current 8 diffs.  Then am I mistaken but the reserve values do not include any ARO which in OBE case is very large.

When comparing to peers, it is really cheap but the stock is falling like a rock in water.  What will stop it?


SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1471 on: June 07, 2019, 07:31:09 AM »
Yet no one is interested whether a corporate buyer or investor.  It is worth noting that the reserve values are based on a inflated WTI price deck by Sproule.  Also Ed Par dif is higher than historical averages.  I'd like to see the reserves valued at a flat 55 wti and using current 8 diffs.  Then am I mistaken but the reserve values do not include any ARO which in OBE case is very large.

When comparing to peers, it is really cheap but the stock is falling like a rock in water.  What will stop it?

Reserve valuation is just an external estimate at a point in time; updated every year because actuals will not be the same as the estimates.
Difference is expected, but absent a major price collapse it is seldom more than 10-15%. Still very cheap.

What will stop it?
Turn over the shareholder base, and show results. RS, debt reduction, successful refinancing, sale of Viking, FFO > 120M, etc.
There may eventually be a sale, but not until after the pipeline expansions are actually built (maybe 3-5 yrs?). 
Not a popular view at the moment!

SD

Liberty

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Re: PWE - Penn West Petroleum
« Reply #1472 on: June 07, 2019, 02:00:03 PM »
-45% YTD, -80% TTM. It just keeps going. At some point it'll go up 20% and the bulls will claim victory.
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roundball100

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Re: PWE - Penn West Petroleum
« Reply #1473 on: June 07, 2019, 02:08:56 PM »
Liberty - but how can anything go wrong here?  If I understand correctly (from others, not you), with this one we get an unlimited number of coin flips, and on every flip, by some magical force, we are guaranteed a 50% chance of being right.  Isn't that the way it works?  :-)

Spekulatius

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Re: PWE - Penn West Petroleum
« Reply #1474 on: June 07, 2019, 04:02:25 PM »
-45% YTD, -80% TTM. It just keeps going. At some point it'll go up 20% and the bulls will claim victory.
Thats how a beach house in St John becomes camping trip.
To be a realist, one has to believe in miracles.

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1475 on: June 08, 2019, 07:23:45 AM »
Laugh all you want, but all OBE need do is cross the CAD 5.00 (CAD 0.715 pre RS) threshold for an institutional investor. We will be up 155% on current purchases, and 40% YTD.  Should OBE re-rate at some point to 4x capex (sub for FFO), or CAD 0.945 pre RS, we will be up 235% on current purchases, and 85% YTD. We lke our odds.

For us, OBE need simply return to industry average. If we just sold out at that point, we could immediatly return proceeds to our bond portfolio and make the house purchase. A house purchased from the proceeds of todays pessimism in the oil patch  ;)

We're just making lemonade out of todays lemons.

To each his own.

SD
 

 




« Last Edit: June 08, 2019, 09:16:03 AM by SharperDingaan »

tombgrt

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Re: PWE - Penn West Petroleum
« Reply #1476 on: June 12, 2019, 02:27:07 PM »
Laugh all you want, but all OBE need do is cross the CAD 5.00 (CAD 0.715 pre RS) threshold for an institutional investor.

Oh, is that all?

Also, enlighten me. Why does it deserve industry average valuation?

constala

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Re: PWE - Penn West Petroleum
« Reply #1477 on: June 13, 2019, 01:46:01 PM »
Some selling pressure was expected after the reverse split, but not this rout.
Down close to 50% in 6 weeks.

Is the bond placement failing? I can't see Peace River not closing.

EV is now 35% of NPV 10 of Proven and Producing reserves. Crazy cheap.

Management called the stock dramatically oversold 2 weeks ago..We are down 25% since.

That should justify a buyback program as a higher priority especially with relative value (less netbacks on the Cardium at WTI 52).

Otherwise OBE could and should be taken private by Front4 and the likes...
Everything in moderation, including moderation.

bizaro86

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Re: PWE - Penn West Petroleum
« Reply #1478 on: June 13, 2019, 04:06:42 PM »
Curious what gives you confidence on Peace River closing? The buyer (Highwood Oil) is publicly traded. They have no cash, and don't really have any room to issue more debt based on their current asset base.

They just went public through a reverse merger with a block chain company less than a year ago. IMO,  their shares are significantly overvalued, which is probably partially due to the significant number of shares off the market on lock-up.

They will need to raise ~half their current market cap in equity and debt on the new assets. Maybe that's possible, but I wouldn't say it's a slam dunk.

I know OBE didn't disclose the buyer, but if you check Highwood's website it's pretty clear they are the buyer.

bizaro86

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Re: PWE - Penn West Petroleum
« Reply #1479 on: June 13, 2019, 04:29:40 PM »
Also, the deal is contingent on financing, so if they don't get the money OBE is out of luck.