Uccmal Posted May 30, 2017 Share Posted May 30, 2017 I am on record! I look forward to a nice rare NY! ;) I would like to see a 5:1 or 10:1 share consolidation. That will make it a marginable security. I looked through the circular but didn't see this. Where's Mortons: I like mine medium.... :-) Link to comment Share on other sites More sharing options...
chrispy Posted May 30, 2017 Share Posted May 30, 2017 The share count consolidation would be fantastic. How it was described in the circular was not very straight forward though and I do not completely understand what they have in mind... Link to comment Share on other sites More sharing options...
Uccmal Posted May 30, 2017 Share Posted May 30, 2017 My understanding is that they want the Balance sheet and Shareholders equity portion of the financial reports to reflect that they are a different company now. Right now they show a deficit (loss) from past years of 6820 million, and assets of 8,999 m. This tends to obfuscate what is really happening and show up in every analysis done of Pennwest as a negative as in "OMG these guys managed to lose 7 Billion dollars... they must be hopeless". Its existence is likely a bit red flag for institutional investors using screens as a starting point. They want to erase the deficit and start with a clean balance sheet with zero deficit, and assets of 2,275 m. Normally, one might call this funny accounting. But in their case the deficit no longer is relevant to the existing company. By clearing this from the balance sheet, they can show more clearly on a go forward basis, what is going on with shareholders equity. As long as it meets with regulator approval, and shareholder approval it appears kosher to me, of a bit unorthodox. Sharper, Is that your take? Link to comment Share on other sites More sharing options...
Pelagic Posted May 30, 2017 Share Posted May 30, 2017 Someone on another board inquired about a share consolidation and this was investor relations' response: Hello, Thank you for reaching out to the Company, we are excited to announce the intended name change as we feel the new brand reflects all the many changes that have taken place at the company over the past several years as well as a strong representation of who we are going forward! At this time, we do not anticipate a share consolidation. We have a deep inventory of projects that represent underlying value growth for the company at today's oil price. The Company's best use of improved liquidity on our balance sheet is to reward shareholders with conservative and disciplined reinvestment in our technical development areas. We believe we will offer a very attractive self-funded growth profile versus other oil and gas players in Western Canada. Thank you, Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 30, 2017 Share Posted May 30, 2017 My understanding is that they want the Balance sheet and Shareholders equity portion of the financial reports to reflect that they are a different company now. Right now they show a deficit (loss) from past years of 6820 million, and assets of 8,999 m. This tends to obfuscate what is really happening and show up in every analysis done of Pennwest as a negative as in "OMG these guys managed to lose 7 Billion dollars... they must be hopeless". Its existence is likely a bit red flag for institutional investors using screens as a starting point. They want to erase the deficit and start with a clean balance sheet with zero deficit, and assets of 2,275 m. Normally, one might call this funny accounting. But in their case the deficit no longer is relevant to the existing company. By clearing this from the balance sheet, they can show more clearly on a go forward basis, what is going on with shareholders equity. As long as it meets with regulator approval, and shareholder approval it appears kosher to me, of a bit unorthodox. Sharper, Is that your take? This is correct. The accounting is also not unusual - it just doesn't occur very often. The potential for a share consolidation is a speculation on our part. For a variety of reasons, it often accompanies this type of transaction - but the decision is entirely up to management; in most instances a trial balloon is floated to assess the potential response. Obviously, we'd prefer a 2:1 consolidation and a close comparison to RRX (share count, production, debt, etc.). As they stack up well in a side-by-side comparison, it becomes very career limiting to not treat each equally. SD Link to comment Share on other sites More sharing options...
Joe689 Posted May 30, 2017 Share Posted May 30, 2017 I am not sure what it is going to take to get some attention to this stock. Crazy to be back to these levels almost after the Viking sale. Now, in an even tighter oil market. Mgmt is trying to do something about it by changing the name..... I would have thought the + EPS would have been our validation. Isn't this company being valued at around 35,000 per flowing barrel right now? And to think we have some of most valuable acreage..... Something isn't right... Link to comment Share on other sites More sharing options...
Cardboard Posted May 30, 2017 Share Posted May 30, 2017 Hi Joe689, It is very simple to understand. Since early 2015 or with the first rebound in February 2015, we have had false start, after false start on the oil price. Every time people got more and more discouraged about the future and future earning power of all these companies including Penn West. What was supposed to be a "V" recovery has turned into an "L". We are at a point now that nobody wants to touch these names in Western Canada especially the smaller ones which includes PWT. What is interesting this time around vs say in 2015 and 2016 is that none (almost) of the names are really at risk on a bankruptcy standpoint even if oil goes to $30. The entire industry has cleaned up its balance sheet, cut cost and is now more disciplined than ever. We then have this non-stop mantra from the media that U.S. shale is over-taking the world but, last week, only 2 oil rigs were added in the U.S. and "estimated" production from Lower 48 only grew by 20,000 bls/d. In the meantime, OPEC and non/OPEC are retiring 1.8 million barrels/day from the market and offshore is dead for years to come. So we seem to have a coiled spring effect in development. My guess is that we will need $55 WTI to be broken convincingly for the shorts to run for cover and for scared investors to join the new stock market leaders. Cardboard Link to comment Share on other sites More sharing options...
clutch Posted May 31, 2017 Share Posted May 31, 2017 Great insight and summary ^ Link to comment Share on other sites More sharing options...
Joe689 Posted June 7, 2017 Share Posted June 7, 2017 Analyst day today! Anyone expecting anything out of the ordinary? Hoping for detailed technicals of our assets. Link to comment Share on other sites More sharing options...
Paarslaars Posted June 7, 2017 Share Posted June 7, 2017 Not expecting anything here, I don't think this stock is going anywhere until oil goes up. :) Unless share consolidation does happen but for now that does not appear to be the case. Link to comment Share on other sites More sharing options...
StevieV Posted June 9, 2017 Share Posted June 9, 2017 I started listening to the investor day presentation today. Nothing earth shattering yet. They talked about the lower cost structure, greater focus and the name change. I am myself indifferent to the name change, but they seemed to think it was necessary/helpful to convey that they are a different company than 4-5 years ago. If it helps the share price, I am for it. Importantly, they are in a sound financial position. Still need the price of oil to turn and head higher, but are not in danger if it doesn't for a while. The share price movement might not be so great if we bounce around in the $40s, but it doesn't mean major financial problems or risk of permanent loss. Link to comment Share on other sites More sharing options...
chrispy Posted June 9, 2017 Share Posted June 9, 2017 Agree with Stevie V. We had a ~12% gain after the nice earnings result that was slowly erased. Since then I believe we have moved in step with oil pricing. It will take some time... Link to comment Share on other sites More sharing options...
Uccmal Posted June 12, 2017 Share Posted June 12, 2017 I have sold all my shares and will probably sell those in my Wife's account. Its not anything specifically wrong with PWT but more the macro environment. I want all my stocks paying sustainable dividends. There isn't going to be anything more than a token dividend for Pwt for years. My only oil stock left is Whitecap, which is trading at a fair price at the present oil prices, and would easily double from here in a 60 plus oil environment if such a thing materializes. I am posting this for disclosure purposes only. Its more a reflection on the way I want my portfolio than anything specifically wrong with Pennwest. Link to comment Share on other sites More sharing options...
SharperDingaan Posted June 13, 2017 Share Posted June 13, 2017 We have also been slowly selling down our PWT shares, but replacing with long dated options to maintain our exposure. Purely because we are returning the bulk of our capital later this month. Nothing to do with PWT itself. We all need to recognize that PWT is an arc, floating on a sea of oil. The share price will rise and fall with the tide; today the forecast is for calm seas, but it’s hard not to notice the developing squall lines all around us. We can’t accurately forecast the weather more than a few days out - yet we are certain than we can accurately forecast the forward price of WTI. PWT has the added problem that a share consolidation could turn the arc into a very robust speedboat, overnight. But until there is clarity, it’s a risk to sell down and miss out on the coil springing back; and a risk to buy now – and discover that a consolidation ultimately doesn’t take place. Doing nothing, and allowing the rebranding to stall, is not really an option. It really means that a management/board share consolidation decision is required, as game-changing as the sale of the Sask. Viking assets was. Piss, or get off the pot. Few dispute that today it’s a well-run company, but the decisions aren’t done yet. SD Link to comment Share on other sites More sharing options...
Cardboard Posted June 13, 2017 Share Posted June 13, 2017 LOL! Consolidating the shares won't be game changing such as the Saskatchewan asset sale. This saved the company and even solved most of its remaining balance sheet concerns all at once with a phenomenal price. What it would solve is margin requirements for retail accounts and allow some institutions to buy in above a certain trading price. Another solution that they should adopt is to leave the NYSE and save on these costs. What is the point of a Canadian company producing now only 30,000 boe/d to be listed in the U.S. on the most expensive market? Regarding valuation, this is not so cheap if you compare to WCP, CPG and a few others. They have all come down in price significantly this year. It looks cheaper on EV/boe/d but, if you consider that they produce 20 to 30% more dry gas per boe/d, it is somewhat justified. You observe the same thing looking at EV/2P reserves at $9/boe vs $11 - $12/boe. Cardboard Link to comment Share on other sites More sharing options...
gary17 Posted June 13, 2017 Share Posted June 13, 2017 SD. what's your forecast for WTI? Link to comment Share on other sites More sharing options...
SharperDingaan Posted June 13, 2017 Share Posted June 13, 2017 Game-changing in that it now opens the shareholder base to the majority of buyers (institutions). There was not much point to saving it, and remaining independent - if only a very small portion of the whole market can actually buy it. They have fixed the debt, fixed the operations; now they need to fix the share count & listings. Easy to do, and relatively low risk - but get off the pot. Our oracle is very dusty, but we think we are going to be in the USD 50-55 range for a long time - with some spikes up and down. The WCSB has the additional wildcards of CAD/USD FX rate, and changing differentials as the oil becomes progressively less landlocked. After that, any change is company specific. All good long term, but any near-term change will be at the doing of PWT - and not the market. SD Link to comment Share on other sites More sharing options...
Joe689 Posted June 14, 2017 Share Posted June 14, 2017 Management is meeting with RBC Capital today. These seem pretty normal but I would imagine these are the exact things they are discussing. Where to go from here? Agree that this company has some decisions to make. Remain independent? Consolidate? Slow production, pay nominal divvy? Possible JV? They need to unlock some value with their low break-even lands. Their technical presentation was excellent. There portfolio gives them excellent flexibility based on the environment and what they are trying to achieve and when. They have all the levers to pull if they need to. Many would appreciate a portfolio like this, and even to average down their breakevens. I think recent share price action has told them they need to make some final decisions. Link to comment Share on other sites More sharing options...
Joe689 Posted June 21, 2017 Share Posted June 21, 2017 Does anybody dare to comment on this extreme weakness. Crazy, 2 week ago, oil sentiment was positive with seeing increasing inventory declines. No extreme bearishness. This market is very ineffective. Lost for words. Link to comment Share on other sites More sharing options...
Paarslaars Posted June 22, 2017 Share Posted June 22, 2017 Probably SD selling ;D I'm holding, too exposed to energy stocks to add at this point. Link to comment Share on other sites More sharing options...
goldfinger Posted June 22, 2017 Share Posted June 22, 2017 Does anybody dare to comment on this extreme weakness. Crazy, 2 week ago, oil sentiment was positive with seeing increasing inventory declines. No extreme bearishness. This market is very ineffective. Lost for words. The market ignored oversupply signs in 2013/14 for a while. Now it is ignoring a growing undersupply situation and will until it is too obvious to ignore (shallow storage inventories and negative supply to production balance at the same time). For now, if I had to guess, we are going to see seesaw moves in the 40/60 range with OPEC trying to mitigate the downside with periodic jawboning and bears coming up with EV/renewable/Tesla/Shale/Glut/Nigeria/Libya and so on arguments. Oil is very volatile and with lots of emotional trading (very volatile commodity). But if I had to guess under the gun I would say that it may reverse brutally not to far to where we are right now... Link to comment Share on other sites More sharing options...
goldfinger Posted June 22, 2017 Share Posted June 22, 2017 Does anybody dare to comment on this extreme weakness. Crazy, 2 week ago, oil sentiment was positive with seeing increasing inventory declines. No extreme bearishness. This market is very ineffective. Lost for words. The market ignored oversupply signs in 2013/14 for a while. Now it is ignoring a growing undersupply situation and will until it is too obvious to ignore (shallow storage inventories and negative supply to production balance at the same time). For now, if I had to guess, we are going to see seesaw moves in the 40/60 range with OPEC trying to mitigate the downside with periodic jawboning and bears coming up with EV/renewable/Tesla/Shale/Glut/Nigeria/Libya and so on arguments. Oil is very volatile and with lots of emotional trading (very volatile commodity). But if I had to guess under the gun I would say that it may reverse brutally not to far to where we are right now... And don't forget that this guy is BAAAACK!!! :o ::) :P Link to comment Share on other sites More sharing options...
Joe689 Posted June 26, 2017 Share Posted June 26, 2017 Annual meeting today. 12pm EST. Anyone going? I voted Yes on all items. This company has done a great job fixing itself. The recent weakness can only be blamed on the oil price decline. Ready to give them another year to unlock the value. In twelve months, we should be in a great place barring any oil collapse. Link to comment Share on other sites More sharing options...
Uccmal Posted June 28, 2017 Share Posted June 28, 2017 Trading halted? Any news? Link to comment Share on other sites More sharing options...
Joe689 Posted June 28, 2017 Share Posted June 28, 2017 Thinking Symbol change? Maybe something bigger. fingers crossed. Link to comment Share on other sites More sharing options...
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