Mason Granger
CONNACHER OIL AND GAS LIMITED
CLC-T
DON'T BUY
Feb 27, 2013
Has been very negative on this name. Thematically they have incurred a ton of debt to develop oil sands and when you are the marginal cost barrel in the oil sands and financing it with debt, it is a risky business and it didn’t work out for them. Have gone through a process of management change, selling assets, etc. Still have a lot of challenges ahead.
If you own, he would be tempted to liquidate your holdings at the earliest opportunity. Has no idea why the stock price has gone up. Believes they still have over $800 million in debt.
A very, very complex situation which he tends to avoid. This is one that could skyrocket or could possibly go bankrupt at some point. When there is not enough clarity, he tends to stay away.
The principal problem is the debt and they are poorly capitalized. Also, price of oil has come under considerable pressure. They are developing long-lived assets, which mean there is really not much probability of bringing forward their cash flows into the here and now.
Has been down at the bottom for quite a while. If you want to throw some money at it, and risk losing it all, this would be a pretty good place to do it. This is very, very risky. He could just never stomach the debt load. Be wary, this could be a loser.
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Has been very negative on this name. Thematically they have incurred a ton of debt to develop oil sands and when you are the marginal cost barrel in the oil sands and financing it with debt, it is a risky business and it didn’t work out for them. Have gone through a process of management change, selling assets, etc. Still have a lot of challenges ahead.