OTCPK:PDPYF - Post by User
Post by
coolandniceon May 17, 2017 4:14pm
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Post# 26256680
Time to buy
Time to buySo I've been downloading PPY's investor presentations quarterly and saving them since mid 2014.
Overall they've done a good job hitting targets and meeting expectations. And that's before they were doing as much hedging as they are now.
The timing of their recent transaction was horrendous. When the deal is done at a low point in the share price I question management's judgement. As Colbert recently said regarding classified code words..."idiot in the oval" comes to mind. Does anyone know why they didn't execute the deal earlier when the share price was north of $9? They'd apparently been talking with the other company for a few years.
Nevertheless, when you compare the May 2017 presentation against Nov 2016 you'll see the following:
2017 Cash flow is $149m in May/17 and $172m in Nov/16
2018 Cash flow is $288m in May/17 and $292m in Nov/16
Capital
2017 Capital is $348m in May/17 and $319m in Nov/16
2018 Capital is $301m in May/17 and $385m in Nov/16
So things are a bit more expensive in 2017 with the merger but you can see the benefits starting in 2018 with reduced capital costs. Based on the forward curve that's why they're now forecasting a 2018 debt/cash flow ratio of 1.2 compared to 1.6 in November. Commodity prices haven't changed that much....if anything the forward curve for oil is now lower.
All of the above bodes very well for the company and our shares post 2017. I believe this company (if they don't do any more ill-timed mergers or acquisitions) can get to $15 in 2-3 years given their growth targets and low costs.