Obsidian Energy (OBE.TO)

To rectify its position with its covenants, the dividend is going to have to go. The best case would be a major cut.

Have had problems from an operational perspective for a number of years. It now appears that there are accounting irregularities as well. This may make their costs look even worse. He would wait and let this play out. The dividend may not be safe.

Down 15% or so today. This will not go to zero. If you made money on a short like this, then take the money and run.

Wouldn’t touch this. Thinks there are long term ongoing issues. Deleveraging by selling off assets. Last quarter was pretty good in terms of capital efficiencies, but when he can invest in so many other names, he doesn’t find this overly compelling.

They have too much debt. They are diverting assets to pay down debt. Sell it, take the tax loss and switch into another name that is firing on all cylinders.

Until she sees their debt numbers and visibility of a lower debt, she will not be buying. Likes to see debt at 2x times or less on a debt to cash flow.

You are seeing a pullback now. They are ‘coming out of the blue’. The market is agreeing with the balance sheet. You want to buy it here. Sell if it goes to EBV -3.

Has been challenged for years. He stayed away and will revisit once they have this cleaned up and have sustained growth.

There are some operational problems with this, so if you could switch to something else, that would be a good idea.

In 2004-2005, when oil prices were climbing from $30-$50 for the 1^st time, oil stocks were not moving up, but the price was. This was an opportunity because if the price stayed, the stocks would be moving up. This company had a difficult time in offsetting its declining production. The company was shrinking, and spent money trying to offset that. Still thinks that is the case.

A bit of a turnaround story although it is a little higher risk then he might generally own in client portfolios. Their latest quarter was really showing higher capital efficiencies. Under budget in a lot of areas. Drilling cycle is high in the Cardium/Viking area. The big issue is their balance sheet and the debt. If they continue to take the steps they have been taking, they can get through this period and hopefully you will see a higher return. 5.6% dividend yield.

Not one he plans to own. A company in significant transition. He doesn’t need to be involved in this and will take a look at the finished product when they are done.

Successfully divested assets in order to lower debt. Efficiencies are improving. He struggles with the fact that other names are working very, very well and what PWT are doing will take a long time. 5.5% dividend yield.

Dividend almost 6%, which is too high. Has too much debt, having a garage sale to sell off assets. They are not repairing the balance sheet.

It is a name that has been around for a long time. They are paying for their sins. Not the most integrated asset package. They are trying to move into a sustainability policy. He does not believe in buying companies going through a transition. There is more cleaning up to do even if there is nothing wrong with them. There are better opportunities. If you don’t own it maybe get into it in June.