Author Topic: PWE - Penn West Petroleum  (Read 537205 times)

Joe689

  • Sr. Member
  • ****
  • Posts: 264
Re: PWE - Penn West Petroleum
« Reply #1650 on: December 30, 2019, 12:36:45 PM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..


muscleman

  • Hero Member
  • *****
  • Posts: 3262
Re: PWE - Penn West Petroleum
« Reply #1651 on: December 30, 2019, 01:41:21 PM »
Just some thoughts....

Opinions differ, but I think we comfortably cross the USD 1.00/share threshold fairly soon. Thereafter a fairly quick run to USD 2.00/share, once institutions become comfortable there isn't going to be a future NYSE delisting, or a loan call. The reality is that any new kind of demand in quantity ... and this thing will quickly rise.

How's your forecasting track record so far in this thread?


Spot on...
With that said, I am turning from very bearish to  very bullish on Oil and other commodities so I’ll be actively hunting in this space now. OBE stock is essentially an equity stub. Maybe SD will be finally right this time.
I am muslceman. I have more muscle than brain!

Gregmal

  • Hero Member
  • *****
  • Posts: 2731
Re: PWE - Penn West Petroleum
« Reply #1652 on: December 30, 2019, 01:49:39 PM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..

Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out.

enoch01

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 556
  • https://twitter.com/eenoch01
Re: PWE - Penn West Petroleum
« Reply #1653 on: December 30, 2019, 02:04:29 PM »
Just some thoughts....

Opinions differ, but I think we comfortably cross the USD 1.00/share threshold fairly soon. Thereafter a fairly quick run to USD 2.00/share, once institutions become comfortable there isn't going to be a future NYSE delisting, or a loan call. The reality is that any new kind of demand in quantity ... and this thing will quickly rise.

How's your forecasting track record so far in this thread?

SD, what other names do you like?

heth247

  • Hero Member
  • *****
  • Posts: 598
Re: PWE - Penn West Petroleum
« Reply #1654 on: December 30, 2019, 02:15:41 PM »
This name is quite the enigma. 

They are on their second "interim" CEO, who happens to have very little O&G operational experience, a hedge fund manager.  They also happen to be in a strategic alternatives.  The chair has stated,

"As we move into the later stages of our previously announced strategic alternatives process, the Board will continue to leverage our various strengths. Having Stephen step into the Interim President and CEO role at this time will enable the Company to take advantage of his vast experience in corporate transactions and capital markets to guide us through the next period of this process."

Then I look at the TPH marketing package, and I see

"The Obsidian Board of Directors has a preference for a corporate
merger transaction, but cash asset sales will be considered to the
extent that they offer compelling value;"

Now I see oil at near yearly highs.    The float has turned over significantly down here.   And mere 2% buy in the past couple weeks brought the stock up near 100%.   I feel like very few shares are left to trade so they continue to shake the tree.  I think this thing transacts.   TPH confirmed the proposals have been received.

The word is that interim CEO, a major shareholder, hedge fund manager is commuting to Calgary.   

They should be at the point of picking a value maximizing option.  Heck, I think they could hedge for a year out at these prices and in return get refinanced no problem.

Joe, when you said "TPH confirmed the proposals have been received.", did you mean that they have received offers?

SharperDingaan

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3371
Re: PWE - Penn West Petroleum
« Reply #1655 on: December 30, 2019, 02:29:42 PM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..

Despite repeated managements best efforts over the last few years, they haven't managed to BK the company. There's no real reason to think they might be successful this time around, when business conditions are a lot better than they used to be. There are lots of very good operational people available, long distance commuting is not a sustainable thing, and any significant asset sale still has to be approved by the BOD.

SD
« Last Edit: December 30, 2019, 02:31:29 PM by SharperDingaan »

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11635
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: PWE - Penn West Petroleum
« Reply #1656 on: December 31, 2019, 07:16:02 AM »
Despite repeated managements best efforts over the last few years, they haven't managed to BK the company. There's no real reason to think they might be successful this time around

The equity has melted 99.5% since 2012. Bankruptcy isn't the *only* bad thing that can happen...
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

FFHWatcher

  • Lifetime Member
  • Sr. Member
  • *****
  • Posts: 424
Re: PWE - Penn West Petroleum
« Reply #1657 on: December 31, 2019, 10:27:55 AM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..

Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out.

Everyone else is just going to let this comment go? 
"Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read.  I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows. 

Gregmal

  • Hero Member
  • *****
  • Posts: 2731
Re: PWE - Penn West Petroleum
« Reply #1658 on: December 31, 2019, 10:46:36 AM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..

Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out.

Everyone else is just going to let this comment go? 
"Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read.  I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows.
With certain setups, particularly heavily indebted companies with new CEOs/management teams, its a no brainer. Look at SD, EXXI, BTU just to name a few.

Use common sense. You're "the guy". Comp is heavily issued in shares. Shares have a noose around their necks called debt. Your earnings, are crippled by interest expenses. You know theres a substantial chance that even if you do your job well, it won't matter.

VS

Restructure the debt, get issued new equity(sometimes as much as 10% of the newCo) and now have a clean balance sheet to work with(which also gives you the ability to enhance your "company" with acquisitions or financial gimmicks).
« Last Edit: December 31, 2019, 10:49:42 AM by Gregmal »

Spekulatius

  • Hero Member
  • *****
  • Posts: 3736
Re: PWE - Penn West Petroleum
« Reply #1659 on: December 31, 2019, 11:46:44 AM »
While competent management is always nice, they just have to not BK the company.



There lies a problem with me.  You have a CEO now that is a non-O&G operator.   Not sure you want him sticking around for six months..

Management teams almost always have the incentive to put a company into bankruptcy. They often come out on the other side owning a significant chunk of the new equity, at zero out of pocket cost; equity mind you, that is in much better shape than the equity they wiped out.

Everyone else is just going to let this comment go? 
"Management teams almost always have the incentive to put a company into bankruptcy". This is simply mind-boggling to read.  I'm not sure where this poster works or what companies he follows but I hopefully have nothing to do with the same companies he follows.

“Almost always “ seems like a hyperbole, but it is true that bankruptcy is a negotiated process. If a debt holder for example wants a company to go into bankruptcy, they can negotiate a package with management and give them enough stock in Newco to align their incentives and get it done often enough. In any case, I would not expect management to fight for common shareholders too hard, when management can build their own escape hatch and screw the common shareholders and regular employees instead.
Life is too short for cheap beer and wine.