RE: RE: RE: What will happen? My answer isn't especially optimistic. It is based on the "Pro Forma Dividend Features & Sustainability Criteria" published when the merger was announced. But yes I am quite optimistic on this merger. The main reasons are:
1- Good margin of safety. Management is quite conservative: high forward sales, low payout ratio in an already quite unfavorable environment (oil differential + gas prices), high exploration budget.
2- Leverage. In my opinion there is huge leverage should the price of gas rise. At the same time, the new company is very resilient in the actual price environment.
3- The quality of assets brought by each partner. Pace has had very encouraging results recently and has good cash flow in this price environment, and Avenex and Charger bring high quality inventory of lands.
4- Quality of management. Despite everything negative that has been written here, I believe the Charger mangement is really first class and has proved it with Provident.
The market is very negative on energy stocks in general right now, and that is probably amplified with a new company. I am confident that on this last point at least, things will get back to normal rapidly after the merger.