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You're welcome.

 

With WCS at a $8.2 differential vs WTI at $61.8 for May, WCS is now at $53.6 or CAD$71+! This was rarely achieved in the best months of 2018. We might very well fall back from current WCS pricing later this year but by then Gear will have lowered debt considerably already. I'm assuming they are a bit above $80m now and could end the 2nd quarter below $70m. Even if WTI were to fall back to $50 in H2, debt would be manageable at around 1.4 times FFO. And we all know what happens with WTI around that price level for even a short period of time. There is of course always the risk that Alberta disregards future high differentials by not reinstating the oil curtailments.

 

With CVE stock moving up slowly, there might be hope yet. I have a feeling these micro and small caps will do nothing until they suddenly find some interest and double in value in a matter of weeks.

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With CVE stock moving up slowly, there might be hope yet. I have a feeling these micro and small caps will do nothing until they suddenly find some interest and double in value in a matter of weeks.

 

Up 25%+ in two trading days? Let's hope this is the return of rationality.

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  • 2 weeks later...

UCP wins Alberta election. This should increase the willingness to get the pipelines issues resolved over time and add additional pressure on the federal level for the elections in October.

 

With higher oil prices sticking around, I'm also confident debt will be closer to $60m than $70m by end of Q2.

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With CVE stock moving up slowly, there might be hope yet. I have a feeling these micro and small caps will do nothing until they suddenly find some interest and double in value in a matter of weeks.

 

Not quite a double yet but at least we touched nearly 50% yesterday.

 

There is also an updated presentation online and the latest monthly update is out. Nothing dramatic but it is nice to visually see debt going down so fast.  8)

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Sorry for spamming. But if you need a good laugh:

 

https://seekingalpha.com/article/4255753-gear-energy-diversifies-lighter-oil-production-cash-flow-becomes-less-volatile

 

Paraphrasing: "One of the more expensive Canadian producers out there, trading at premium."

 

 

::)

 

I tried to get some info on valuation comparables from him but it's clear he doesn't look at valuation of GXE or any of its peers.

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  • 2 months later...

https://finance.yahoo.com/news/gear-energy-ltd-announces-board-120000679.html

 

O'Connell, who still owns a little over 5% of the company, is leaving the board.  He's been selling very slowly over the past three years.  Wonder if a big block of stock will be trading anytime soon.

 

Also, new presentation out: https://gearenergy.com/wp-content/uploads/2019/07/GearEnergyJuly2019.pdf

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https://finance.yahoo.com/news/gear-energy-ltd-announces-board-120000679.html

 

O'Connell, who still owns a little over 5% of the company, is leaving the board.  He's been selling very slowly over the past three years.  Wonder if a big block of stock will be trading anytime soon.

 

O’Connell doesn’t directly own the shares but as CEO of Davis Rea is deemed to have control. He only owned 125k directly as noted below from the management circular.

 

“Includes: (i) 10,247,213 Common Shares held by the Davis-Rea Equity Fund; (ii) 2,651,883 Common Shares held by Davis-Rea Ltd.; (iii) and 750 Common Shares held by Solutions Investment Management Inc., each of which are directly or indirectly controlled by Mr. O'Connell; and (iv) 125,000 Common Shares held directly by Mr. O'Connell”

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  • 8 months later...

Unfortunately I own a good chunk of them too but I haven't added anything during the drop.  WCS is currently 6.45 a barrel (https://www.bnnbloomberg.ca/oil#/WCS_Crude).  Kind of hard to call a bottom when they are something like 50% hedged and only for a short period.  They are a zero unless the prices bounce back hard very quickly, but I see no point in selling at a 90% loss and will just treat it like a soon to expire call option. 

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  • 1 year later...

WCS prices are up about 800% as well, so it makes sense, but definitely a crazy turnaround. Obviously I wish I gambled and bought some more shares, even as late as November when we still had the overhang of the convertible debt, but I still have my original shares which are well in the money now. Bought mostly two years ago around C$0.55, and nice to see them finally have a good move up.  

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I am still holding. I am not selling, not yet. That 30% pop was interesting on a big volume. Today is less good, but still up. I am surprised, yeah. Probably a catch-up and. I am guessing somebody relatively big is trying to get in.

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I unfortunately switched from GXE to ATU because I thought it would be safer as it has little debt and a management team that doesn't like to dilute shareholders. That means less growth but now that prices are back up they are drilling again. It's only costing me a few hundred percent so far ?

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