Athabasca Oil Sands Corp

ATH-T

TSE:ATH

0.50
0.02 (3.13%)
Athabasca Oil Corporation is a Canadian energy company with a focused strategy on the development of thermal and light oil assets.
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Analysis and Opinions about ATH-T

Signal
Opinion
Expert
COMMENT
COMMENT
January 16, 2020
A penny stock, so less institutional money driving it and more retail money, so more volatility. Bearish channel. Constructively positive on oil, and oil comes into season in February. This one is a small cap, so he's not as excited as he would be by a Suncor.
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A penny stock, so less institutional money driving it and more retail money, so more volatility. Bearish channel. Constructively positive on oil, and oil comes into season in February. This one is a small cap, so he's not as excited as he would be by a Suncor.
DON'T BUY
DON'T BUY
December 31, 2019
It's on the verge of breaking out--and he buys only breakouts, not before. Chart shows a downtrend, but if it break a trendline it is a possible buy.
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It's on the verge of breaking out--and he buys only breakouts, not before. Chart shows a downtrend, but if it break a trendline it is a possible buy.
PARTIAL SELL
PARTIAL SELL
December 19, 2019
They want shareholders to vote to free up restricted cash to potentially buy back stock next year. The key challenge for them is liquidity. There are no sellers and few buyers. If you are looking to buy a small amount, they offer fairly good torque. It is one of the best horses to pick.
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They want shareholders to vote to free up restricted cash to potentially buy back stock next year. The key challenge for them is liquidity. There are no sellers and few buyers. If you are looking to buy a small amount, they offer fairly good torque. It is one of the best horses to pick.
DON'T BUY
DON'T BUY
December 10, 2019
Good, long-life production. Balance sheet is stretched, though. MEG Energy is better on the heavier oil side; it's in better shape. Problem is there are no new buyers of energy stocks. We are seeing a bit of a bounce in the past month in oil, however, which is encouraging. Don't rush out to buy ATH, but MEG, Baytex or Crescent Point. There's some risk in ATH.
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Good, long-life production. Balance sheet is stretched, though. MEG Energy is better on the heavier oil side; it's in better shape. Problem is there are no new buyers of energy stocks. We are seeing a bit of a bounce in the past month in oil, however, which is encouraging. Don't rush out to buy ATH, but MEG, Baytex or Crescent Point. There's some risk in ATH.
HOLD
HOLD
November 15, 2019
He thinks there are too few energy players to make the space relevant -- and that is true for the entire space. Only the larger players will get investor interest. He sold this at $0.84 and thought that was the low. The concern he has is that they are not using free cash flow to buy shares, but that has changed. They have taken down a field for maintenance and it is not producer like before -- he has to research this further.
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He thinks there are too few energy players to make the space relevant -- and that is true for the entire space. Only the larger players will get investor interest. He sold this at $0.84 and thought that was the low. The concern he has is that they are not using free cash flow to buy shares, but that has changed. They have taken down a field for maintenance and it is not producer like before -- he has to research this further.
DON'T BUY
DON'T BUY
October 11, 2019
The market cap has become too small for a large fund manager to follow anymore. He sold around $0.82 and it continued to sell off much lower. That scared him about the liquidity. He would need to see $60 WTI and $15 heavy oil differentials to be able to generate enough free cash flow to excite him back in. On top of that, their JV in Duvernay will require more capital outlay soon. He would look elsewhere.
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The market cap has become too small for a large fund manager to follow anymore. He sold around $0.82 and it continued to sell off much lower. That scared him about the liquidity. He would need to see $60 WTI and $15 heavy oil differentials to be able to generate enough free cash flow to excite him back in. On top of that, their JV in Duvernay will require more capital outlay soon. He would look elsewhere.
PAST TOP PICK
PAST TOP PICK
October 11, 2019
(A Top Pick Oct 19/18, Down 63%) Unfortunately the market cap has become too small for the big institutional investors to be interested in this. He expects the dividend paying energy stocks would rebound well before this one does.
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(A Top Pick Oct 19/18, Down 63%) Unfortunately the market cap has become too small for the big institutional investors to be interested in this. He expects the dividend paying energy stocks would rebound well before this one does.
PAST TOP PICK
PAST TOP PICK
August 30, 2019
(A Top Pick Aug 17/18, Down 61%) He sold it and bought Cenovus. There's no demand for micro-caps which ATH sadly has become. Their cash flow goes up the most if WCS differentials stay low. To own this, you must believe in $60 WTI or $15 or less differentials. Also, ATh didn't want to buyback shares, which he disagrees with. It now trades near all-time lows.
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(A Top Pick Aug 17/18, Down 61%) He sold it and bought Cenovus. There's no demand for micro-caps which ATH sadly has become. Their cash flow goes up the most if WCS differentials stay low. To own this, you must believe in $60 WTI or $15 or less differentials. Also, ATh didn't want to buyback shares, which he disagrees with. It now trades near all-time lows.
PAST TOP PICK
PAST TOP PICK
July 19, 2019

(A Top Pick Jul 20/18, Down 58%) A small-cap oil stock, but nobody is buying small-cap oil. They are the most levered to a rising oil price or a compressing WCS oil price differential. Their outlook is good, but the market isn't buying. He sold this and bought Cenovus and Whitecap Resources.

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(A Top Pick Jul 20/18, Down 58%) A small-cap oil stock, but nobody is buying small-cap oil. They are the most levered to a rising oil price or a compressing WCS oil price differential. Their outlook is good, but the market isn't buying. He sold this and bought Cenovus and Whitecap Resources.

WATCH
WATCH
July 17, 2019
He does not currently own this. They have a billion dollar joint venture to explore the Duvernay and a similar venture with Statoil and also in thermal development. This may be creating some angst with investors. He is watching this to see how this develops, but is not ready to step in yet.
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He does not currently own this. They have a billion dollar joint venture to explore the Duvernay and a similar venture with Statoil and also in thermal development. This may be creating some angst with investors. He is watching this to see how this develops, but is not ready to step in yet.
COMMENT
COMMENT
April 26, 2019
ATH-T is a prior top pick that he sold about a month ago to buy CPG-T (who has been buying back shares on free cash-flow). He has concerns over ATH-T liquidity in the market and he held heavy oil exposure in other bigger names. ATH-T has done well to deleverage their balance sheet.
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ATH-T is a prior top pick that he sold about a month ago to buy CPG-T (who has been buying back shares on free cash-flow). He has concerns over ATH-T liquidity in the market and he held heavy oil exposure in other bigger names. ATH-T has done well to deleverage their balance sheet.
BUY
BUY
March 8, 2019
If you believe in $60 oil or higher, this offers the highest leverage of any name. If you believe in $55 or lower, you do not want to own this. This company is very sensitive to oil price and oil differential. Negative cash flow at $55 oil and positive cash flow at $60 oil. If Line 3 does come on next year, and oil by rail ramps up, and if get positive resolution to Keystone or trans mountain, this could be a double or triple.
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If you believe in $60 oil or higher, this offers the highest leverage of any name. If you believe in $55 or lower, you do not want to own this. This company is very sensitive to oil price and oil differential. Negative cash flow at $55 oil and positive cash flow at $60 oil. If Line 3 does come on next year, and oil by rail ramps up, and if get positive resolution to Keystone or trans mountain, this could be a double or triple.
COMMENT
COMMENT
January 25, 2019
He thinks WCS will stabilize at $17 discount to WTI for the next few years. If you see Line 3 being completed this year and rail filling the gap, this company offers a tremendous leverage to tightening WCS. Their debt levels have been cut sharply. At $55 WTI, this company generates massive cash flow. At $80 WTI and $20 WCS discount, his target is $4.13 for the stock price. At $70 it is $2.67 per share. You can see the leverage.
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He thinks WCS will stabilize at $17 discount to WTI for the next few years. If you see Line 3 being completed this year and rail filling the gap, this company offers a tremendous leverage to tightening WCS. Their debt levels have been cut sharply. At $55 WTI, this company generates massive cash flow. At $80 WTI and $20 WCS discount, his target is $4.13 for the stock price. At $70 it is $2.67 per share. You can see the leverage.
BUY
BUY
December 14, 2018
When MEG-T is gone, ATH-T will be the highest levered company to tightening heavy differentials. They trade on 11 times cash flow and that can fall to 4.5 times with a tighter heavy differential. He sees heavy differentials at $20. He sees a target of $2.67 in share price. He is the second largest shareholder in this company. (Analysts’ price target is $2.16)
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When MEG-T is gone, ATH-T will be the highest levered company to tightening heavy differentials. They trade on 11 times cash flow and that can fall to 4.5 times with a tighter heavy differential. He sees heavy differentials at $20. He sees a target of $2.67 in share price. He is the second largest shareholder in this company. (Analysts’ price target is $2.16)
BUY
BUY
November 16, 2018
He likes the long term prospects. He thinks he is the largest shareholder of this company. It is a small cap name, but should be able to monetize some midstream assets very soon which will reduce debt. He thinks this could be a multi bagger. It is one of his higher beta names.
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He likes the long term prospects. He thinks he is the largest shareholder of this company. It is a small cap name, but should be able to monetize some midstream assets very soon which will reduce debt. He thinks this could be a multi bagger. It is one of his higher beta names.
TOP PICK
TOP PICK
October 19, 2018

With MEG potentially taken out, this may the only significant opportunity to maximize the torque of heavy of oil differentials tightening. He expects the valuation to rise by 50%-100% on oil prices between $70-$80 per barrel.

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With MEG potentially taken out, this may the only significant opportunity to maximize the torque of heavy of oil differentials tightening. He expects the valuation to rise by 50%-100% on oil prices between $70-$80 per barrel.

BUY
BUY
September 14, 2018

This holds the type of exposure to oil he likes best as he is very bullish on oil prices going forward. With the Canadian energy sector at the point that everyone hates it, now is the time to buy. They are going to monetize their midstream assets that are high in demand, which will allow them to pay down almost all their debt. If you run an $80 WTI price, he sees this trading in the mid-$4 range.

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This holds the type of exposure to oil he likes best as he is very bullish on oil prices going forward. With the Canadian energy sector at the point that everyone hates it, now is the time to buy. They are going to monetize their midstream assets that are high in demand, which will allow them to pay down almost all their debt. If you run an $80 WTI price, he sees this trading in the mid-$4 range.

TOP PICK
TOP PICK
August 17, 2018

He hopes they will be able to monetize their midstream assets in the near future for $300 million, which would almost eliminate their debt. This is a good play for tightening heavy oil differentials and higher WTI – which he sees over $80 next year. Yield 0%. (Analysts’ price target is $2.44)

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He hopes they will be able to monetize their midstream assets in the near future for $300 million, which would almost eliminate their debt. This is a good play for tightening heavy oil differentials and higher WTI – which he sees over $80 next year. Yield 0%. (Analysts’ price target is $2.44)

DON'T BUY
DON'T BUY
August 10, 2018

A heavy oil producer that has a lot of leverage on the balance sheet. It trades a relative cheap multiple, but he does not like the exposure to heavy oil. It is a speculative name in his mind that lacks the growth parameters they look for.

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A heavy oil producer that has a lot of leverage on the balance sheet. It trades a relative cheap multiple, but he does not like the exposure to heavy oil. It is a speculative name in his mind that lacks the growth parameters they look for.

TOP PICK
TOP PICK
July 20, 2018

They are the number two in Canada. Should be able to monetize some assets and should be debt free. The name is trading at just over 2 times EBITA. At $70 oil, he sees a 102% upside. At $80 oil, he sees an upside of 172%. (Analysts’ price target is $2.41)

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They are the number two in Canada. Should be able to monetize some assets and should be debt free. The name is trading at just over 2 times EBITA. At $70 oil, he sees a 102% upside. At $80 oil, he sees an upside of 172%. (Analysts’ price target is $2.41)

COMMENT
COMMENT
June 15, 2018

Pay attention to producers, and how they’re going to respond to the price of oil. Look at the big producers, the Suncors of the world. They’re going to lead the commodities. Athabasca was up $0.01, when oil was down. Expect Athabasca to get its legs underneath it and start to push ahead. The resistance level is important. Looks pretty good, but prefers Parex, Kelt, and Enerplus.

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Pay attention to producers, and how they’re going to respond to the price of oil. Look at the big producers, the Suncors of the world. They’re going to lead the commodities. Athabasca was up $0.01, when oil was down. Expect Athabasca to get its legs underneath it and start to push ahead. The resistance level is important. Looks pretty good, but prefers Parex, Kelt, and Enerplus.

TOP PICK
TOP PICK
June 11, 2018

They have higher operating costs due to oil sands. He has not sold any when it recently peaked. We have exhausted sellers recently. They could be debt free by end of year. (Analysts’ target: $2.25).

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They have higher operating costs due to oil sands. He has not sold any when it recently peaked. We have exhausted sellers recently. They could be debt free by end of year. (Analysts’ target: $2.25).

DON'T BUY
DON'T BUY
May 14, 2018

He's simply not buying Athabasca (or CPG-T) [to answer a client whose question involves an inside joke].

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He's simply not buying Athabasca (or CPG-T) [to answer a client whose question involves an inside joke].

COMMENT
COMMENT
May 10, 2018

He likes the move it has done recently on good volume but if you look at the longer term, it is not there yet.

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He likes the move it has done recently on good volume but if you look at the longer term, it is not there yet.

TOP PICK
TOP PICK
May 4, 2018

His go to name for when WTI returns to $80 next year. Even at today’s high stock price, this could still go to $5 per share. They have reduced their leverage and could become debt-free in the near future. Yield 0%. (Analysts’ price target is $1.85 )

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His go to name for when WTI returns to $80 next year. Even at today’s high stock price, this could still go to $5 per share. They have reduced their leverage and could become debt-free in the near future. Yield 0%. (Analysts’ price target is $1.85 )

TOP PICK
TOP PICK
April 17, 2018

There is a concern that they have too much debt. However, they have been reducing it and are now down to 275 million debt, which is about 2x cash flow. They could be debt free in the next 3-to-4 months because they are going to be monetizing some of their infrastructure assets. This offers the highest leverage to a change in oil price. This is where money will flow when there is a change in sentiment. They have 55% exposure to light oil, a long reserve life, with a clean balance sheet. (Analysts’ price target is 1.70$)

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There is a concern that they have too much debt. However, they have been reducing it and are now down to 275 million debt, which is about 2x cash flow. They could be debt free in the next 3-to-4 months because they are going to be monetizing some of their infrastructure assets. This offers the highest leverage to a change in oil price. This is where money will flow when there is a change in sentiment. They have 55% exposure to light oil, a long reserve life, with a clean balance sheet. (Analysts’ price target is 1.70$)

COMMENT
COMMENT
February 8, 2018

The company hit the marketplace with a flurry of deals 10 years ago. For the most part, hey executed on those deals. More like a macro call on oil.

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The company hit the marketplace with a flurry of deals 10 years ago. For the most part, hey executed on those deals. More like a macro call on oil.

DON'T BUY
DON'T BUY
January 5, 2018

He would be concerned, not because of the oil price, but because of oil differentials. Historically the “heavy oil” differential was about $15. This company is not integrated, so doesn't have refinery capabilities, so are exposed to a raw bitumen price. Canada is out of pipe, and as a result has to ship barrels by rail. There’ve been some challenges for rail companies to scale up, and at the same time oil is now competing with grains and products to get rail capacity. The differential should settle at about $20 in the next month, but looming ahead of us is a change from the International Maritime Association, where they have mandated all ships globally to not be able to burn fuel with a sulphur content in excess of 0.5% or 1.5%. In Canada, the average is closer to 4.5%, so demand for Canadian heavy could be reduced, or the differential will need to maintain a wider than historical average, to compensate refiners from having to add additional complexity.

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He would be concerned, not because of the oil price, but because of oil differentials. Historically the “heavy oil” differential was about $15. This company is not integrated, so doesn't have refinery capabilities, so are exposed to a raw bitumen price. Canada is out of pipe, and as a result has to ship barrels by rail. There’ve been some challenges for rail companies to scale up, and at the same time oil is now competing with grains and products to get rail capacity. The differential should settle at about $20 in the next month, but looming ahead of us is a change from the International Maritime Association, where they have mandated all ships globally to not be able to burn fuel with a sulphur content in excess of 0.5% or 1.5%. In Canada, the average is closer to 4.5%, so demand for Canadian heavy could be reduced, or the differential will need to maintain a wider than historical average, to compensate refiners from having to add additional complexity.

HOLD
HOLD
January 2, 2018

A "wait and see" story. It has done very, very little in the last 2.5 years. If you own this and you believe in the energy sector, he would continue to hold. It will probably be at the same price next year.

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A "wait and see" story. It has done very, very little in the last 2.5 years. If you own this and you believe in the energy sector, he would continue to hold. It will probably be at the same price next year.

COMMENT
COMMENT
November 15, 2017

A heavy oil producer, primarily in the oil sands. Their leverage to the oil price is higher than others. It’s one of the high beta names that people typically trade around, as opposed to investing in.

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A heavy oil producer, primarily in the oil sands. Their leverage to the oil price is higher than others. It’s one of the high beta names that people typically trade around, as opposed to investing in.

COMMENT
COMMENT
July 19, 2017

If you want to be in Canada, and want a very small cap and uber leverage to the oil price, this is a pretty good pick. They did a royalty deal on their oil sands project, which was nothing short of genius. Payments don’t start until oil exceed something like $70-$75. Their total cash/cost break-evens are around $44. If you are a believer in $65-$70 oil, this stock could really, really work. If you are a believer that we are stuck in a $50-$60 range for the next year, there are better areas to be in.

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If you want to be in Canada, and want a very small cap and uber leverage to the oil price, this is a pretty good pick. They did a royalty deal on their oil sands project, which was nothing short of genius. Payments don’t start until oil exceed something like $70-$75. Their total cash/cost break-evens are around $44. If you are a believer in $65-$70 oil, this stock could really, really work. If you are a believer that we are stuck in a $50-$60 range for the next year, there are better areas to be in.

BUY
BUY
March 23, 2017

One of the best beta picks you can select in Canada today. They have a high quality asset. They have an increase in free cash flow, which they can now deploy. They have extraordinary leverage to an increase in oil price. It is probably not the best investment unless you believe in oil higher than $50. It could double if you are bullish on oil.

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One of the best beta picks you can select in Canada today. They have a high quality asset. They have an increase in free cash flow, which they can now deploy. They have extraordinary leverage to an increase in oil price. It is probably not the best investment unless you believe in oil higher than $50. It could double if you are bullish on oil.

BUY
BUY
February 10, 2017

About 10 years ago, they had a number of oil sand leases they sold off to Japanese partners. As they developed those, they collected the money and bought other assets and started drilling them. Recently bought a big oil sands operating project off of Statoil (STO-N). A good asset at a bargain price. The stock is fairly cheap. You could buy this one here and just hold onto it.

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About 10 years ago, they had a number of oil sand leases they sold off to Japanese partners. As they developed those, they collected the money and bought other assets and started drilling them. Recently bought a big oil sands operating project off of Statoil (STO-N). A good asset at a bargain price. The stock is fairly cheap. You could buy this one here and just hold onto it.

HOLD
HOLD
December 6, 2016

(Market Call Minute.) Keeping an eye on this because they’ve had a changeover of management and board. They seem to be doing the right things, but just not quite there yet for him.

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(Market Call Minute.) Keeping an eye on this because they’ve had a changeover of management and board. They seem to be doing the right things, but just not quite there yet for him.

COMMENT
COMMENT
September 16, 2016

An interesting one, and she is warming up to the story. It has lots of opportunities in terms of a shale play called the Duvernay. They are trying to maintain cash flow with a SAGD heavy oil project that they are doing quite well with. Thinks there is a future with this company. If oil prices go to $32, this will be hit because it is a heavy oil story.

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An interesting one, and she is warming up to the story. It has lots of opportunities in terms of a shale play called the Duvernay. They are trying to maintain cash flow with a SAGD heavy oil project that they are doing quite well with. Thinks there is a future with this company. If oil prices go to $32, this will be hit because it is a heavy oil story.

COMMENT
COMMENT
August 2, 2016

Usually, in resources, if you have a lot of land or a lot of cash, time is your friend. This is the only one in Canada that had a lot of land and a lot of cash, and time was their enemy. What they had promised to investors was taking their conventional oil sands business, using the excess cash it had generated, and investing in a bunch of unconventional opportunities. What they ran out of was time and money.

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Usually, in resources, if you have a lot of land or a lot of cash, time is your friend. This is the only one in Canada that had a lot of land and a lot of cash, and time was their enemy. What they had promised to investors was taking their conventional oil sands business, using the excess cash it had generated, and investing in a bunch of unconventional opportunities. What they ran out of was time and money.

DON'T BUY
DON'T BUY
July 29, 2016

Not a name he would own. They did a highly admirable job of deleveraging and doing a streaming deal on their oil. Everyone knows the catalysts that have come and gone and now no one cares. Everyone knows it is cheap and yet nothing is happening. He would look to others.

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Not a name he would own. They did a highly admirable job of deleveraging and doing a streaming deal on their oil. Everyone knows the catalysts that have come and gone and now no one cares. Everyone knows it is cheap and yet nothing is happening. He would look to others.

COMMENT
COMMENT
May 31, 2016

Has a joint venture with Murphy Oil, where they are basically being carried for the next few years on a Duvernay play. They also have their thermal project, which will be pretty steady and generate a nominal amount of cash flow. Has a much healthier balance sheet now, and expects they will look for other opportunities while Murphy is busy drilling out this project.

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Has a joint venture with Murphy Oil, where they are basically being carried for the next few years on a Duvernay play. They also have their thermal project, which will be pretty steady and generate a nominal amount of cash flow. Has a much healthier balance sheet now, and expects they will look for other opportunities while Murphy is busy drilling out this project.

TOP PICK
TOP PICK
April 25, 2016

7.5% bond maturing Nov 19/17. Probably one of the only exploration/production companies on the continent that is in a net cash position. It will have about $900 million in cash when they do the Murphy Oil joint venture, and have about $800 million of debt. The bond is worth $550 million. More senior to it is a bank debt of about $250 million. The $250 million debt matures after the bond in 2019, which is not a position that bankers usually like. The loan has a “springing” maturity, which means if any of the bonds are outstanding 6 months before they are due, the bank debt becomes due immediately. The company likes the bank debt which has a very attractive terms. Thinks the company is going to do a combination of paying down all this bond and maybe refinance with the new bond for $150 million.

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7.5% bond maturing Nov 19/17. Probably one of the only exploration/production companies on the continent that is in a net cash position. It will have about $900 million in cash when they do the Murphy Oil joint venture, and have about $800 million of debt. The bond is worth $550 million. More senior to it is a bank debt of about $250 million. The $250 million debt matures after the bond in 2019, which is not a position that bankers usually like. The loan has a “springing” maturity, which means if any of the bonds are outstanding 6 months before they are due, the bank debt becomes due immediately. The company likes the bank debt which has a very attractive terms. Thinks the company is going to do a combination of paying down all this bond and maybe refinance with the new bond for $150 million.

COMMENT
COMMENT
April 14, 2016

To him, this has always been one of those stocks that is an “over the horizon” situation. Although he is moderately optimistic about the oil sector, the oil sands have a new future ahead of them. $50 oil is pretty skinny for the oil sands, and a lot of projects are probably going to go by the boards.

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To him, this has always been one of those stocks that is an “over the horizon” situation. Although he is moderately optimistic about the oil sector, the oil sands have a new future ahead of them. $50 oil is pretty skinny for the oil sands, and a lot of projects are probably going to go by the boards.