Author Topic: PWE - Penn West Petroleum  (Read 306397 times)

goldfinger

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Re: PWE - Penn West Petroleum
« Reply #1110 on: July 02, 2017, 09:20:31 PM »
Out of everything they need to work on, Management decides to spend time and resources on a name change? WTH?

Brand is very important in a commodity business like oil, right?

It probably has to do with investors not consumers?  ::)


Uccmal

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Obsidian Energy: Former Pwt/pwe
« Reply #1111 on: August 09, 2017, 04:56:43 AM »
Decent Q2 results.  Looks like a steady run rate of 30 k bpd for now.  Reducing Capex for the second half to conserve cash until/if prices rise.  There are showing some discipline.  Not quite EPS profitable yet. 

Their metrics are looking reasonable.  Not as good as Whitecap but getting close. 
GARP tending toward value

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1112 on: August 09, 2017, 07:52:56 AM »
Very nice report gentlemen.

Just to highlight a few positives that are somewhat buried in the numbers.

Q2 numbers are extremely good, DESPITE 1) Q2 being the slow season, 2) Q2 including the seasonal maintenance expenses, and 3) 4,649 boe/d of legacy assets contributing a 10 boe/d net-back loss. All that drag … & they still manage to essentially break-even. Congratulations.

But better still … is the $1 boe/d net-back saving expected over 2H 2017 (increasing FFO by 2.7M/Qtr), phenomenal Viking success, and the additional wells coming on stream in Q3 – raising the light/heavy oil mix.

The 4,649 boe/d of legacy assets (16% of production) aren’t a liability either, as they are not shut-in (ie: they are at least covering some of their fixed costs), & their costs are already being covered. Every $1 increase in price from today’s levels, goes straight to the bottom line.

The company has turned around, crossed the break-even point, and is set up for a great future.
May we humbly suggest that the next step is to fix the share count.

SD


chrispy

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Re: PWE - Penn West Petroleum
« Reply #1113 on: August 10, 2017, 12:41:01 PM »
Always get a lot out of what you share, SD.

What do you guys think will be the floor on this? I did not expect this to go below $1 with pricing close to $50. Seems like prices will have to sustain at 50 or above, this SEC business will have to be resolved, EPS positive for 1 or 2 quarters, and ideally shares bought. Management has not discussed purchasing shares yet, correct?

I plan on picking up a chunk of shares soon, it just seems like tomorrow the price will always be cheaper. While the business aspect seems to be doing well, the market sentiment changing seems a little ways away.

Uccmal

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Re: PWE - Penn West Petroleum
« Reply #1114 on: August 10, 2017, 01:22:13 PM »
Always get a lot out of what you share, SD.

What do you guys think will be the floor on this? I did not expect this to go below $1 with pricing close to $50. Seems like prices will have to sustain at 50 or above, this SEC business will have to be resolved, EPS positive for 1 or 2 quarters, and ideally shares bought. Management has not discussed purchasing shares yet, correct?

I plan on picking up a chunk of shares soon, it just seems like tomorrow the price will always be cheaper. While the business aspect seems to be doing well, the market sentiment changing seems a little ways away.

I think we need to see a share consolidation of at least 5:1.  And I wonder why they didn't do it during the special meeting.  Its not marginable below $3.00 CDN, and institutions are governed by various mandates that dont allow them to buy below $3.00 or $5.00 per share, what have you.  So, right now available shareholders are limited.  I came back in, and hold 30 k as a placeholder at 1.61 average.  Small position, but I need time to get some comfort with the new management.  They have done a better job hedging.  Part of the problem is that the comparables with prior periods are meaningless.  Unless one dives deep it looks as though they are worse off. 

And yes the SEC suit is a distraction but it isn't going to break the company. 

I hold this and a big position in WCP, which is doing pretty poorly as well (I am not underwater on WCP).  They are getting a combination of no love, and an effect from low oil prices.  WCP has stated that they will remain funds flow positive to $40 USD per barrel.  OBE is not quite that well off. 

As usual, a big bump in commodity proces would start to feed huge cash flows to everyone in the oil patch.  It is beyond me that when or if this will occur. 



Until we see
GARP tending toward value

Paarslaars

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Re: PWE - Penn West Petroleum
« Reply #1115 on: August 11, 2017, 01:52:20 AM »
Welcome back!  :)

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1116 on: August 11, 2017, 08:15:23 AM »
Our own thoughts are that OBE should delist from both the NYSE and TSE, and relist on the TSE.
There are various reverse takeover models OBE could look at, but the basics are that OBE essentially takes itself private, & relists as another company.

Yes it's a rarity, but it makes a lot of sense if the price (including take-out premium) is well below BV; and old shareholders on take-out day are offered an election to either take cash, or their proportional share value in the new listing. Given that every share repurchased at < BV adds to the collective gain in IV, to benefit - all shareholders have strong incentive to hold their position on take-out day. Materially reducing the amount of cash required.

Nightmare for our short friends, hence the dissing ...
1) To stop the process, the current share price has to rise to at least its equivalent - under what it would be if there was a new listing, 2) the floor on the current share price becomes the take-out price the company sets - & the lower the current price goes, the more the take-out premium can be, 3) a short time-line forces short covering into the market, creating the demand to drive the current share price to at least the take-out price the company has set, 4) demonstrate the precedent using OBE, changes the game; & allows others to do the same thing - behooving the industry to give OBE a boost all along the chain, 5) plays into the calls to do a 'buy-back' - we have!, 6) allows a new capital structure, and a dividend on a materially lower number of shares, 7) it is essentially cost free - as the cost of the transaction can be written off against the BV gain on repurchase.     

Surprising if their advisers haven't suggested something like this to them, even if it is something of a 'black swan'.
Our own thoughts are roughly a 2:1 share consolidation, for a float big enough to work with - but nice and tight.

There will be a lot of very angry shorts reading this; so expect the current share price to go a lot lower.
All good  ;)

SD