alertmeipp Posted January 22, 2014 Share Posted January 22, 2014 Penn West Provides Fourth Quarter, 2013 Operational Update and Announces Additional Non-Core Asset Dispositions for Expected Proceeds of Approximately $175 Million http://finance.yahoo.com/news/penn-west-provides-fourth-quarter-213900213.html Nice to see they can actually get things sold at a fair price. (but doesn't look as good as the previous although this is more gas-weighted) Link to comment Share on other sites More sharing options...
alertmeipp Posted January 22, 2014 Author Share Posted January 22, 2014 down big on the news. sigh... Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 22, 2014 Share Posted January 22, 2014 alltime low as i see. alertmeipp whats your take on this? Link to comment Share on other sites More sharing options...
alertmeipp Posted January 22, 2014 Author Share Posted January 22, 2014 it doesn't feel great losing money. they are just executing the plan, buyer today, the company is 500 mills cheapee coz of a 175m transaction the sale price is not great but those are gassy assets with high cost. Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 22, 2014 Share Posted January 22, 2014 it doesn't feel great losing money. they are just executing the plan, buyer today, the company is 500 mills cheapee coz of a 175m transaction the sale price is not great but those are gassy assets with high cost. ok great thanks for your answer. i have no Position. but maybe a will start one. stock is at alltime low Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 23, 2014 Share Posted January 23, 2014 alertmeipp if i could you ask for your estimate Intrinsic Value of Pennwest. would be nice to hear from you. :) the market i think is making to much Panic mode. they sell the asset which is not bad for the Company. Link to comment Share on other sites More sharing options...
xtreeq Posted January 23, 2014 Share Posted January 23, 2014 For future reference there is/was another PWE thread in the General Discussion area http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/pennwest/ Link to comment Share on other sites More sharing options...
Myth465 Posted April 10, 2014 Share Posted April 10, 2014 Just doubled my PWE leap positions, current holdings are up 50% so far. I think this could be a big winner with the D being put up for sale. Link to comment Share on other sites More sharing options...
Myth465 Posted May 2, 2014 Share Posted May 2, 2014 Great quarter in my opinion. They are really executing, makes me want to buy more. Also like they are not hyping asset sales. One day we will have a nice announcement on sales. http://pennwest.mediaroom.com/index.php?s=27585&item=135216 After selling significant assets CF actually improved due to pricing and $ weakness. This will be a great quarter for Canadian O&G. Link to comment Share on other sites More sharing options...
Uccmal Posted May 2, 2014 Share Posted May 2, 2014 Great quarter in my opinion. They are really executing, makes me want to buy more. Also like they are not hyping asset sales. One day we will have a nice announcement on sales. http://pennwest.mediaroom.com/index.php?s=27585&item=135216 After selling significant assets CF actually improved due to pricing and $ weakness. This will be a great quarter for Canadian O&G. Agreed, These guys are on the ball. My position is large now. My problem with buying more is that I cant get to a reasonable target price at this point in time. If it dips into the low 9s again I will buy more but for now I will sit tight. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 2, 2014 Author Share Posted May 2, 2014 It's a rather dramatic change, and it started from the top. Link to comment Share on other sites More sharing options...
tengen Posted July 30, 2014 Share Posted July 30, 2014 Account irregularities at Pennwest. Stock sinking like a rock. http://www.calgaryherald.com/business/Penn+West+warns+accounting+irregularities/10073522/story.html I've never really trusted earnings statements from any big company. There's just too many ways to manipulate them. I guess Pennwest had some incompetent accountants to do it in an illegal way. They've been fired and I still have faith in the integrity of the current management team. Note that the irregularities were detected by the new CFO. My immediate thought is that the market has over-reacted; so I added to my position. Link to comment Share on other sites More sharing options...
alertmeipp Posted July 31, 2014 Author Share Posted July 31, 2014 Complicated feeling. Lost lots of paper profit today but nice to see the new CFO cleaning house. This will lead to a much stronger company down the road and should help asset sales down the road with cleaned book. Operationally this is going to the right direction and showing pretty good #s already. Hope this will be over soon. Link to comment Share on other sites More sharing options...
yzstevie Posted July 31, 2014 Share Posted July 31, 2014 Anyone following the story at Penn West? A large-cap oil and gas explorations company in Canada. Stock dropped by 14% on an accounting issue brought up voluntarily by the management. Think the drop was overdone and provides a good buying opportunity. Company is in a turnaround phase with excellent new management, and the company is deeply undervalued both on an intrinsic value basis and relative value basis. Thoughts? Link to comment Share on other sites More sharing options...
kevin4u2 Posted July 31, 2014 Share Posted July 31, 2014 Anyone following the story at Penn West? A large-cap oil and gas explorations company in Canada. Stock dropped by 14% on an accounting issue brought up voluntarily by the management. Think the drop was overdone and provides a good buying opportunity. Company is in a turnaround phase with excellent new management, and the company is deeply undervalued both on an intrinsic value basis and relative value basis. Thoughts? What is your intrinsic value and how did you calculate it? TIA Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted July 31, 2014 Share Posted July 31, 2014 Account irregularities at Pennwest. Stock sinking like a rock. http://www.calgaryherald.com/business/Penn+West+warns+accounting+irregularities/10073522/story.html I've never really trusted earnings statements from any big company. There's just too many ways to manipulate them. I guess Pennwest had some incompetent accountants to do it in an illegal way. They've been fired and I still have faith in the integrity of the current management team. Note that the irregularities were detected by the new CFO. My immediate thought is that the market has over-reacted; so I added to my position. Judging from the press release, it seems like the company capitalized expenses that should have been expensed. This is a classic method for inflating earnings (e.g. Worldcom). I don't think that the accountants were incompetent. Somebody told them to do this. Link to comment Share on other sites More sharing options...
saltybit Posted July 31, 2014 Share Posted July 31, 2014 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/bitter-rivals-face-off-over-future-of-penn-west-petroleum/article19868726/ Bitter rivals face off over future of Penn West Petroleum Link to comment Share on other sites More sharing options...
peter1234 Posted July 31, 2014 Share Posted July 31, 2014 Account irregularities at Pennwest. Stock sinking like a rock. http://www.calgaryherald.com/business/Penn+West+warns+accounting+irregularities/10073522/story.html I've never really trusted earnings statements from any big company. There's just too many ways to manipulate them. I guess Pennwest had some incompetent accountants to do it in an illegal way. They've been fired and I still have faith in the integrity of the current management team. Note that the irregularities were detected by the new CFO. My immediate thought is that the market has over-reacted; so I added to my position. Judging from the press release, it seems like the company capitalized expenses that should have been expensed. This is a classic method for inflating earnings (e.g. Worldcom). I don't think that the accountants were incompetent. Somebody told them to do this. Agreed, old Accounting staff probably was too aggressive and got accountants to sign off on it or even withheld information. This statement might need further analysis: It added it may also cease to be in compliance with debt covenants, adding it is talking with lenders about possibly waiving those covenants. Link to comment Share on other sites More sharing options...
Andy Dufresne Posted July 31, 2014 Share Posted July 31, 2014 Anyone following the story at Penn West? A large-cap oil and gas explorations company in Canada. Stock dropped by 14% on an accounting issue brought up voluntarily by the management. Think the drop was overdone and provides a good buying opportunity. Company is in a turnaround phase with excellent new management, and the company is deeply undervalued both on an intrinsic value basis and relative value basis. Thoughts? yzstevie, Welcome to the Corner :) Please note that there already is a Penn West thread in existence so it would be better to concentrate all of the conversations there. Best, Andy Link to comment Share on other sites More sharing options...
biaggio Posted July 31, 2014 Share Posted July 31, 2014 Chinese trope for crisis=danger + opportunity or something like that. A few weeks ago I was wishing for a larger position in PWE. Now I have the opportunity. Concerns ("danger"): -will there be more accounting issues uncovered -how will restatements effect operations going forward -how will restatements effect debt covenants -are directors/audit committee members that originally signed off on statements the ones looking into this. Facts ("opportunity"): i still has good assets with 2p reserves valued at $9B vs EV of ~$6.5B (though I think the value of the oil in this evaluation is overstated if the projected operating costs in the estimate are over stated-anyone more knowledgeable on this correct me if I am wrong) If they produce 104,000 barrel per day with $29 netback they will have cash flow of just over $1b not bad for EV of $6.5b (15% return) ii I like new management -they seem like straight shooter -so far has done great job operationally -I am glad they have not had a fire sale on their assets iii I think PWE can be a good business. I think the world is still going to need oil in 5-10 years iv restatements occurred under old management My 5 year outcome probability calculation (number pulled out of my a$$ mostly so may not mean anything but I think might be helpful to think of possibility) i Bullish Projection--> 50% =Meets management goal for 2018 of $4.20/fund from op x 7.5 or $32 = $16 ii Base rate--> 23%=No growth in net back EPS $2.24 EPS x 7.5 $17 $4 23%= current earnings with 3-4% growth x 7. $20 $5 iv Bear Case---> 2% economic disaster with oil dropping by 50% IV cut in half = $4 $1 2%bankrupt= shares go to 0 0 Total 5 year estimated probable outcome: $26---> IRR 24% + 6% dividend Link to comment Share on other sites More sharing options...
alertmeipp Posted July 31, 2014 Author Share Posted July 31, 2014 Thanks for sharing your #s. The recent weakness and the accounting news do provide good opportunity to load up. Some tidbits. http://www.bnn.ca/News/2014/7/30/Canadian-energy-giant-Penn-West-reveals-accounting-irregularities-.aspx “Although [second-quarter] production volumes were better than expected, we believe that the improving operations strategy will be overshadowed by the accounting audit and its potential ripple effects across the business,” Wood said in a research note. “Although Penn West appears to be forthcoming in its findings early on, the broader impact on financial operating measures is relatively unclear today.” Penn West did not say which employees are “believed responsible” for the accounting irregularities, but noted they are no longer working for the company. The review arose from information brought to the attention of chief financial officer David Dyck, who started on May 1, taking over from Todd Takeyasu. In an interview late Tuesday, Mr. Takeyasu said the committee’s concerns could be a result of different interpretations of accounting methods. “Some of this stuff is grey, but I’m probably not at liberty to say much,” he said. “Some of that is possibly a matter of documentation.” Penn West’s former chairman, Bill Andrew, who is now chairman and CEO of Long Run Exploration Ltd., was not immediately available for comment. Link to comment Share on other sites More sharing options...
Uccmal Posted August 7, 2014 Share Posted August 7, 2014 Quite a good article on the PWT nnsense: http://www.calgaryherald.com/business/Yedlin+Penn+West+reaction+inflated/10092994/story.html?__federated=1 biaggio, I too,would like to increase my position. I am trying to scare up some cash. Dividend is nearly at the 7% level again. Link to comment Share on other sites More sharing options...
Myth465 Posted August 7, 2014 Share Posted August 7, 2014 I bought more leaps. Much more confident on PWE than last time it was at 7. People say its very similar to martinrae which rebounded quite well. I am an accountant, and honestly this pullback doesnt make much sense. If you dont know the company then I can understand why you would sell, but this is new Management fixing things, not old Management hiding things.... Link to comment Share on other sites More sharing options...
Andy Dufresne Posted August 7, 2014 Share Posted August 7, 2014 Myth, Can you explain your confidence? Assuming you bought the Jan 2016 strike 7 at the closing price of USD 1.4, you are effectively paying 13.7% annualized for 17 months AND giving up 7% in the dividend, so it's paying almost 21% for 5.35 times leverage (7.5 divided by 1.4) ... Just trying to get a handle on your thinking here Thanks! Link to comment Share on other sites More sharing options...
Myth465 Posted August 7, 2014 Share Posted August 7, 2014 I bout the $5 Jan 2016, prefer the leverage to the yield. It was about 15 cents away from being in the money. Link to comment Share on other sites More sharing options...
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