Author Topic: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.  (Read 260570 times)

Cardboard

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No change in WCS pricing or future differential that I can observe. Spot WCS actually went up $0.62/barrel CAD on Thursday or following the news???

https://www.psac.ca/business/gmpfirstenergy/

https://www.cmegroup.com/trading/energy/crude-oil/western-canadian-select-wcs-crude-oil-futures.html

Seems like a major over-reaction for equities especially with WTI at $70 U.S. I added some WCP, IPO and BTE on the drop.

BTE is now much less dependent on heavy following its merger with RRX which had the highest netbacks in Canada. A significant portion of their production is also from the Eagle Ford or very light and no egress issues unlike the Permian. That company is now fixed, solid plan, good management, really cheap and producing significant free cash flow using fair assumptions vs today's pricing:

http://www.baytexenergy.com/files/pdf/news-releases/2018/2018-08-22%20Baytex%20Raging%20River%20Closing_Final.pdf

Definitely worth a look IMO and should become a go to name in Canada with 100,000 boe/d.

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SafetyinNumbers

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No change in WCS pricing or future differential that I can observe. Spot WCS actually went up $0.62/barrel CAD on Thursday or following the news???

https://www.psac.ca/business/gmpfirstenergy/

https://www.cmegroup.com/trading/energy/crude-oil/western-canadian-select-wcs-crude-oil-futures.html

Seems like a major over-reaction for equities especially with WTI at $70 U.S. I added some WCP, IPO and BTE on the drop.

BTE is now much less dependent on heavy following its merger with RRX which had the highest netbacks in Canada. A significant portion of their production is also from the Eagle Ford or very light and no egress issues unlike the Permian. That company is now fixed, solid plan, good management, really cheap and producing significant free cash flow using fair assumptions vs today's pricing:

http://www.baytexenergy.com/files/pdf/news-releases/2018/2018-08-22%20Baytex%20Raging%20River%20Closing_Final.pdf

Definitely worth a look IMO and should become a go to name in Canada with 100,000 boe/d.

Cardboard

I imagine there were a few PMs who wanted to show less energy exposure at month end so booted out the likes of BTE and CPG. Both should have been much less impacted from this news.
Top 5 positions: ELF GCM.NT/GCM.WT.B TII.V PIF ATTO

Cardboard

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I don't know about that. Even CPG is now at only around 40% institutional.

It even created a good opportunity in your Altura.

I have no clue anymore with these Canadian E&P. I have been trading cheap for cheaper for 2 years. I just wish I had bought American like Tombgrt or things like CRC and WLL.

Cardboard


Joe689

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These valuations on some of these Canadian O&G are bizarre.  They haven't been this low since oil was bottoming in the 20s!      What can the companies do to fix this?   Some are already paying hefty dividends.    Some are already buying back shares.   Is the government sentiment really in full control of these valuations? Maybe the FEDs should nationalize the entire industry.   When do the majors step in and provide the back drop?     Why explore when you can buy quality production near 40K per flowing barrel. 

At some point the valuations become so stupid, they should just turn off the lights and return all capital to shareholders?

tombgrt

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Trust me Cardboard, I have been bleeding as well the last month. Nearly all oil holdings in Canada too. I feel like I'll give back all YTD gains if wti goes back to $65 now. Just insane. Best in class netbacks, high growth, prudent use of debt, ... It al doesn't matter it seems. Transmountain is a setback and i think investors are fed up.

I'm also enjoying the pain of TOO and GCM, all coming at once. :D

Uccmal

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Its extremely painful thats for sure. 

I keep threatening to myself that I am going to bail and pack it in and throw all the cash into BAM but its already over 20% for me with the subs included.

However, I keep buying Whitecap on the dips.  My ACB on WCP is now 8.28 for a huge position.  The dividend, on a Canadian after tax basis is now higher than my cost of borrowing.  And as far as I know they are still profitable, buying back stock, and the CEO and CFO are buying stock.  Fagerheim is one of the best operators out there. 

Enbrdige will be pumping 400,000 barrels more sometime next year.  Trans Mountain will likely get pushed through, oil prices may go way higher.  If they dont, due to recession, or slow growth, the better operators are well hedged. 
GARP tending toward value

Joe689

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This Canadian sector is something else.    Got tons of fear selling, short selling and there is zero support.  I imagine the banks have pulled support to make a point.    At least we have hard assets here, some of which are producing significant free cash flow.   Their stock price tries to tell you a different story.    Fundamentally, a lot of the companies damaged do not even deal with heavy oil and therefore nothing with Trans mountain.    Nor will Nafta really effect them.   All SENTIMENT.    Good time to make a lot of money over the next 12 months if oil continues its climb and politics fix themselves. 

sculpin

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Its extremely painful thats for sure. 

I keep threatening to myself that I am going to bail and pack it in and throw all the cash into BAM but its already over 20% for me with the subs included.

However, I keep buying Whitecap on the dips.  My ACB on WCP is now 8.28 for a huge position.  The dividend, on a Canadian after tax basis is now higher than my cost of borrowing.  And as far as I know they are still profitable, buying back stock, and the CEO and CFO are buying stock.  Fagerheim is one of the best operators out there. 

Enbrdige will be pumping 400,000 barrels more sometime next year.  Trans Mountain will likely get pushed through, oil prices may go way higher.  If they dont, due to recession, or slow growth, the better operators are well hedged.

Filing
Date   Transaction
Date   Insider Name   Ownership
Type   Securities   Nature of transaction   Volume or Value   Price
Sep 6/18   Aug 31/18   Whitecap Resources Inc.   Direct Ownership   Common Shares   38 - Redemption, retraction, cancellation, repurchase   -602,700   $8.33
Sep 6/18   Aug 31/18   Whitecap Resources Inc.   Direct Ownership   Common Shares   38 - Redemption, retraction, cancellation, repurchase   602,700   $8.33

Cardboard

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This is no doubt feeling exactly like late 2008/early 2009 for Canadian energy investors.

I look at my portfolio in the morning and I kind of assume a 3 to 4% hit down daily on the energy side. My hope is nearly gone. I still keep trading value or cheap for cheaper but, it seems pointless.

You have debt free companies trading for a song and getting hit hard. TCW is a good example. You cannot go bankrupt with no debt!

Sentiment is abysmal accross. You go on Stockhouse and some are calling for an immediate sale of WCP. This is one company that has done exactly what investors wanted it to do and yet it has been punished harshly.

The cleansing was done in 2015-2016 or when all companies that could not survive low oil prices (this is below $50 oil by the way!) restructured or went bankrupt. Today we have a bunch of healthy companies with debt under control, still transacting assets for healthy metrics (see Surge buy yesterday) and making a ton of cash flow at current energy prices.

Maybe that a big recession is lurking or that emerging markets will significantly slow down their oil purchase with their currencies way down and USD too high however, how low is low enough for oil shares?

Some such as CPG trade below 08/09 levels and well below when oil was at $25 in early 2016. If this isn't maximum pessimism then I don't know what is?

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Joe689

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Bank and others will step in when Ottawa does something.  Sign NAFTA and get shovels back in the ground on TM and it fixes everything.   Instead, Canada holds out....for what... for this...