RE:RE:RE:About Peyto's forward saleshoubahop wrote:
"Mr. Momo, you are looking at natgas spot price and might be missing the big picture, imo."
Not only spot, but their hedges as well. I think i've stated this several times here. So NO, it's not ONLY spot prices that i've included in my assessment, it takes into account ALL their hedging contracts for 2024 as well.
"it adds up to $1B+ in sales for 2024"
Again...... as i've stated, for 2024, they will bring in the SAME revenue with 130K boepd as they did in 2023 with 100k. Could be just $1B or could be around $1,1 or $1,2. Depends on where spot ends up throughout the year for their unhedged production. So this is NOT in dispute, asi've stated as much............
THE REAL question now is will ~$1B be sufficient with the new addition & added expenses for the Repsol acquisition? It was......just barely pre Repsol, but is it now? We will see...........with Q1. I guess they could juggle around with capex to cover ANY shortfall......if needed.
"My guess is FCF available will cover dividends and reduce debt by $125m during 2024."
I strongly doubt that......They will not be reducing their debt load any time soon. Not with natgas prices so low. On the contrary, i fully expect them to keep dipping into their lines of credit & continue INCREASING their debt. And this goes for ALL the heavily weighted gassers, not only Peyto, Remember they have to also pay TAXES these miniscule profits......if there's ANY profits at all this year. Do they have any tax pools left over to absorb the tax hit? I don't know but if you're a s/h you might want to take a look at the also.
Also, i want to state that my original premise here was that i inferred that Peyto was taking a page from Birchcliff's tactics. "Attempting" to keep their divvy intact, at any cost, by "borrowing" and increasing their debt loads. Thier respective paths to that end are a little different, as Peyto took a different spin on it, with the Repsol acquisition. And i think i've proven that quite clearly. Some might disagree or try to argue semantics, but in the end, they are totally wrong and the FACTS prove that!
So......i'll end with this..........
Are Natgas prices to low,even for Peyto & even with hedging? Yes..........Check!
Is Peyto struggling to blance Capex. divvy obligations & cover ALL expenses? Yes.....Check!
Did they try to remedy this problem & avoid cutting the dividend with Repsol? Yes.....Check!
Did the Repsol acquisition drastically increase their debt load? Yes......Check!
Will this new addition be sufficient to cover all of their required obligations for 2024? Unknown....!
Q1 should provide SOME inisight into this, but then again these Canaidan O&G entities are notorious with playing around with figures and they could back-end their Capex spending to cover any short falls for Q1 & Q2......hoping for a recovery in the second half. So we might not know their TRUE situation until much later........
All i know is what the facts, environment & sentiment tell me and things are not looking good for Canadian energy....especially the heavy gassers. So you better hope Trump loses in November as the Biden adminstration has been a boon for Canadian O&G stocks. Will this be true agian thistime around? Probably not......as FULLY expect the markets to crash should Sleepy Senile Joe get re-elected a second time...............
So like i said......the Canadian energy sector is totally scewed either way.........
GLTA