PWE - Penn West Petroleum

[Cardboard]

Personally, I am hoping for some additional disclosure around asset sales, namely: Waskada. I would also not rule out the possibility of one more asset sale being announced with Q3 results.

 

I am also expecting more details on future operating costs: opex and G&A with the various sales that have been made and restructuring.

 

Finally, what debt maturities are now looking like, amount drawn on credit facility and what does the Fall review with bankers looks like?

 

Cardboard

[Wilson-TPC]

Wo! What a move today!

[goldfinger]

Might be the coming of the announcement of a new asset deal...  ::)

 

[elevensecsrt4]

I agree nice move !  I took some off the table last week ( a little too early I see )

 

 

[sampr01]

Its not fun riding down from $5 to 0.45 and PWE was down everyday 10-20% . But like this change in direction.

[goldfinger]

Its not fun riding down from $5 to 0.45 and PWE was down everyday 10-20% . But like this change in direction.

 

It was fun massively adding at 45c to 50c/share though, what a CRAZY price!

It reminds me of stocks like office depot during the crash of 2008/2009 - nuts.

I didn't go for office depot but in this precise case, Penn West, bankruptcy risks have always been remote.

[investor-man]

move is probably from this? http://www.financialwisdomworks.com/barclays-increases-penn-west-petroleum-price-target-to-c1-00-pwt/121793/

[goldfinger]

Might be good to have large amounts of excess assets in this environment: http://www.bloomberg.com/news/articles/2015-11-02/price-recovery-may-follow-rise-in-global-oil-m-a-bernstein-says

[Wilson-TPC]

Totally missed this one. Congrats to the longs.

[investor-man]

Totally missed this one. Congrats to the longs.

 

heh, I've still got $0.10 to go before I'm back in the black on this one.

[influx]

move is probably from this? http://www.financialwisdomworks.com/barclays-increases-penn-west-petroleum-price-target-to-c1-00-pwt/121793/

 

Barclays has a stake, small one though and they have an incentive too.

The price has already climbed when Barclay gave a recommendation. Perhaps to give it a floor?

[influx]

Totally missed this one. Congrats to the longs.

 

So, what do you think now? How are you thinking now? Would you please share more of your thoughts and why do you think you missed and how do you (rationally) feel about this?

 

Because as far as I remember, it was a totally rational call of yours, very quantitative, without giving anything to the qualitative side of the things. I respect that. You are safe like that and you work by rules 1 and 2 of WB :)

But I am not sure this is ride is over and PWT is out of the woods, yet.

[Uccmal]

Totally missed this one. Congrats to the longs.

 

So, what do you think now? How are you thinking now? Would you please share more of your thoughts and why do you think you missed and how do you (rationally) feel about this?

 

Because as far as I remember, it was a totally rational call of yours, very quantitative, without giving anything to the qualitative side of the things. I respect that. You are safe like that and you work by rules 1 and 2 of WB :)

But I am not sure this is ride is over and PWT is out of the woods, yet.

 

I agree.  There was nothing at all wrong wth Wilson's analysis or conclusions on a quantitative basis.  I invested in this on a qualitative basis, mostly watching management, and the BOD actions.

 

And, I have no reason to believe we may not see less than $1.00 Cdn again.  The probability seems lower but is not gone by any means.

[Cardboard]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

[goldfinger]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

+1

[goldfinger]

Nawar uncovered a new package PWE just put for sale through TD: http://www.investorvillage.com/uploads/69286/files/PWTroyalties2.pdf

This company seems to have plenty of tricks left... with these assets.

[Wilson-TPC]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

Agree with Cardboard. My mistake was to come into this with the expectations that Penn West was in distress. Through a few careless mistakes, worked my way to a fair value, and then when the non-core asset sales went through, didn't have the balls to pull the trigger on PWE when it was at $0.48. After it ran up, never bought cause I was experiencing anchoring and adjustment bias.

 

A few points I want to make here, PWE is doing a superb job in getting these asset sales through in an environment like this. Its cardium assets won't be worth nearly as much as Viking, so I would value that a bit lower. With relations to how I think about it now, I think Cardboard's value of $2 US is right, and it will probably get there. From then on, it's a matter of executing additional non-core until its left with 56k boe/d of production. The next phase of the investment would be hinged on commodity prices and the company's ability to execute.

 

BXE is another one I think Cardboard owns as well, my firm owns a chunk of BXE and expect non-core to go through first half next year. That's one I'm paying most attention to along with Gear Energy.

 

But I think PWE will work out fine from here, and as long as the other noncore goes through, it's a multi bagger from here... A total miss for me.

[influx]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

didn't have the balls to pull the trigger on PWE when it was at $0.48.

 

Why? This is the interesting bit that I would like to discuss to learn more about ourselves.

 

I pulled partial trigger at C$0.67

I wanted to put more, that would have been like an additional four times the previous partial trigger at C$0.67. I wanted to have the dry powder and I wanted to avoid having none. Was I scared? Did that play a thing and I am thinking is because of the dry powder? No. I wanted to show a discipline to myself. The very same reason I am sitting with this and havent sold anything yet.

[Cardboard]

Wilson-TPC,

 

My post was not directed at you but, at general comments around the quantitative value of Penn West. By the way the $2 figure and flowing numbers are all in CAD$.

 

I do own BXE but, kind of sick from the 3 round trips since late August when I got in. My issue with the company is natural gas which can't find a bottom and that is a big portion of their production.

 

RMP looks like a terrific pick from Packer. The upside is limited with their strong balance sheet (less upside leverage from EV/boe/d or EV/2P metrics) but, netbacks are excellent. I would not be surprised if this one gets taken out.

 

I also like GXE but, it seems to suffer from the same disease as TBE right now: they produce heavy oil so nobody wants to touch them. By the way, TBE is extremely cheap with netbacks similar to GXE. They are also moving to medium weighted oil with their Provost play which will improve further their profitability.

 

Cardboard

[Jurgis]

didn't have the balls to pull the trigger on PWE when it was at $0.48.

 

Why? This is the interesting bit that I would like to discuss to learn more about ourselves.

 

I pulled partial trigger at C$0.67

I wanted to put more, that would have been like an additional four times the previous partial trigger at C$0.67. I wanted to have the dry powder and I wanted to avoid having none. Was I scared? Did that play a thing and I am thinking is because of the dry powder? No. I wanted to show a discipline to myself. The very same reason I am sitting with this and havent sold anything yet.

 

When PWE was at $.48, pretty much all oil cos were in freefall and I had to balance between choosing what to buy, keeping some powder dry, and keeping myself from being scared shitless. ;)

 

There's always coulda-shoulda with bottoms. Very few people buy significant positions close to exact bottoms.

 

Have fun.

[StevieV]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

Agree with Cardboard. My mistake was to come into this with the expectations that Penn West was in distress. Through a few careless mistakes, worked my way to a fair value, and then when the non-core asset sales went through, didn't have the balls to pull the trigger on PWE when it was at $0.48. After it ran up, never bought cause I was experiencing anchoring and adjustment bias.

 

A few points I want to make here, PWE is doing a superb job in getting these asset sales through in an environment like this. Its cardium assets won't be worth nearly as much as Viking, so I would value that a bit lower. With relations to how I think about it now, I think Cardboard's value of $2 US is right, and it will probably get there. From then on, it's a matter of executing additional non-core until its left with 56k boe/d of production. The next phase of the investment would be hinged on commodity prices and the company's ability to execute.

 

BXE is another one I think Cardboard owns as well, my firm owns a chunk of BXE and expect non-core to go through first half next year. That's one I'm paying most attention to along with Gear Energy.

 

But I think PWE will work out fine from here, and as long as the other noncore goes through, it's a multi bagger from here... A total miss for me.

 

"it's a multi bagger from here... A total miss for me."  Why not invest now then?  Still anchoring or invested in other companies?

[goldfinger]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

Agree with Cardboard. My mistake was to come into this with the expectations that Penn West was in distress. Through a few careless mistakes, worked my way to a fair value, and then when the non-core asset sales went through, didn't have the balls to pull the trigger on PWE when it was at $0.48. After it ran up, never bought cause I was experiencing anchoring and adjustment bias.

 

A few points I want to make here, PWE is doing a superb job in getting these asset sales through in an environment like this. Its cardium assets won't be worth nearly as much as Viking, so I would value that a bit lower. With relations to how I think about it now, I think Cardboard's value of $2 US is right, and it will probably get there. From then on, it's a matter of executing additional non-core until its left with 56k boe/d of production. The next phase of the investment would be hinged on commodity prices and the company's ability to execute.

 

BXE is another one I think Cardboard owns as well, my firm owns a chunk of BXE and expect non-core to go through first half next year. That's one I'm paying most attention to along with Gear Energy.

 

But I think PWE will work out fine from here, and as long as the other noncore goes through, it's a multi bagger from here... A total miss for me.

 

"it's a multi bagger from here... A total miss for me."  Why not invest now then?  Still anchoring or invested in other companies?

 

3Q earnings may give another good entry point... not sure but very possible. Also 1H 2016 may be weak (global market demand still well supplied worldwide) - even though new asset sales may pop at any time; management is aggressive at marketing these assets and recent sales are a good sign that good prices can still be obtained...

[Uccmal]

I took some shares off the table today and in the past week.  I am speculating the earnings release to take the stock down a bit.  I still hold about 30 k shares; down from around 50 k.  Always a dicey proposition trying to out guess Mr. Market. 

[Wilson-TPC]

I have to disagree with you guys on the quantitative.

 

This company is worth $2 a share under a bankruptcy/liquidation scenario. You can do the math many different ways but, based on their transactions and all the transactions made in the oil patch, that is how much they are worth at minimum or roughly $30,000 to $35,000 per boe/day. You get a similar story looking at reserves: proven, developed, undeveloped, etc.

 

That $2 is also before they made the sale of Weyburn and Mitsue. This changes the story a lot since they obtained a lot more than the flowing barrel numbers that I quoted above under terrible circumstances. I also described previously in this thread on where they stand now following these two sales in terms of Net debt/Produced boe/day vs their peers. They are at par.

 

Q3 numbers will be ugly as for most players, so this excitement in the share price that we are seeing now is likely premature. However, I firmly believe that the story is moving from survival to looking a lot more like the Whitecap's and Crescent Point's which will mean a re-rating. You can do the math comparing with them and will realize that the upside from here is huge.

 

Cardboard

 

Agree with Cardboard. My mistake was to come into this with the expectations that Penn West was in distress. Through a few careless mistakes, worked my way to a fair value, and then when the non-core asset sales went through, didn't have the balls to pull the trigger on PWE when it was at $0.48. After it ran up, never bought cause I was experiencing anchoring and adjustment bias.

 

A few points I want to make here, PWE is doing a superb job in getting these asset sales through in an environment like this. Its cardium assets won't be worth nearly as much as Viking, so I would value that a bit lower. With relations to how I think about it now, I think Cardboard's value of $2 US is right, and it will probably get there. From then on, it's a matter of executing additional non-core until its left with 56k boe/d of production. The next phase of the investment would be hinged on commodity prices and the company's ability to execute.

 

BXE is another one I think Cardboard owns as well, my firm owns a chunk of BXE and expect non-core to go through first half next year. That's one I'm paying most attention to along with Gear Energy.

 

But I think PWE will work out fine from here, and as long as the other noncore goes through, it's a multi bagger from here... A total miss for me.

 

"it's a multi bagger from here... A total miss for me."  Why not invest now then?  Still anchoring or invested in other companies?

 

Massive anchoring combined with a big position in Gear and BXE. I'm fully invested in O&G.

[goldfinger]

I took some shares off the table today and in the past week.  I am speculating the earnings release to take the stock down a bit.  I still hold about 30 k shares; down from around 50 k.  Always a dicey proposition trying to out guess Mr. Market.

 

Actually I kind of learned "tactical" selling and buying from you on this board. This kind of helped me with PWE since the beginning. But I feel like "sitting on my ass" this time around...