Obsidian Energy

OBE-T

Have had challenges and is not a story she has invested in. Likes companies that grow value for shareholders, and this company has essentially done the opposite. You get less and less barrels per share, less NAV per share. Have some great assets and have done a lot to try to transition the company, however with oil prices, it makes it very difficult. They are going to have to sell a lot of assets to fix their balance sheet problems.

They bought companies and did not integrate them very well and then the oil price fell. They did well in selling off some properties. He thinks they will make it, but continue to be highly levered. They will do well when the price of oil goes up.

Why get into trouble if oil prices don’t recover. There are better companies out there. It has been a disaster in how they have managed their business.

It has exploded recently. It is a call on where energy prices are going. They are being forced to sell assets because of debt.

There is no question the assets are fabulous. The problem is the balance sheet that is causing them to sell off assets. It will probably react if oil prices go up. It may be good for a trade sometimes but he would not invest in it.

Struggles to see equity value in this company unless you are a really, really big oil bull. Operationally they have achieved inferior results in all of their operations compared to any other companies in their plays. Management has been a little aggressive in the use of financial leverage. They need to sell assets to pay down debt.

Has not owned it for 5 years. It has too much debt and equity is grinding toward zero. If oil spikes to $90 they could survive. Avoid it.

The worst stock he has chosen in years. He likes the new management and what they are doing. They still have a big debt load and have been selling off assets to bring it down. He changed it from a buy to a hold. They are in dangerous territory. They should not go bankrupt and they could have a big turnaround.

Their leverage is far too high. The market is being absolutely merciless with corporations where the balance sheet doesn’t look strong or pristine. Thinks this is going to be pretty dead money for a while.

It is quite a disaster technically. The downtrend is long and has accelerated. It is a falling wedge that broke out to the downside. Get out if it rallies. It is a very risky stock.

This model works at $70 oil, but does not work at $45 oil, so he sold his holdings. The risk is, if oil prices stay where they are, they will probably have to cut their dividends again. They have good bank lines, but these days those are questionable, as he expects banks will be cutting back on them.

It has been such a bad story. Just unwinding the problem, but they are just too overlaid with debt. Someone has to swoop in and buy it. They have to sell off the crown jewels to pay off the debt. They are stuck. You don’t need to own it. Look for quality companies.

Because of debt, he would not be holding this. The biggest risks are crude oil and natural gas prices and a drilling success. He prefers the companies with the least amount of debt and with a low cost of production.

It was not well capitalized. It is not one he would go anywhere near whatsoever. This is not a well capitalized, well run company. They could be a total casualty.

His company has downgraded this as there are some concerns going forward. If you own, consider switching into something else. Look for the ones that are going to rebound the fastest. Companies with long-term hedges, low debt and low cost of production.