RE:RE:RE:RE:RE:Last post was loooong Think of it like adding tools to your tool box...
TD is 007 (kinda like Bond )
For fun, next time you buy or sell a stock 15 mins later you will see on your TSX page your TD 007 transaction go through ( a real sense of pride and accomplishment ). Hey Honey come look thats my trade ! , I just played poker with our life savings.....kidding of course.
Brother there is not enough ink for my opinion of the current situation with STP.
Ultimately the market decides the fate of securities and unfortunately perception, emotion and a lack of patience sometimes plays a much larger role than fundamentals.
Generally the broader market hates oilsands companies right now especially juniors but they won't forever...(if you really thought about it , isn't that when we should buy stuff at bargain prices that what Buffett has done his entire career).
Suffice to say there are more positives than negatives(IMHO).
Book Value 1.11/share
The Oil is there.
These projects are huge and very long term, expectations were too high with STP. and the market is disappointed and management has themselves to blame 18 - 24 months was unrealistic to hit a real production number and they should have known better. Never has a new SAGD project reached conformance in that short a period , heck Suncor's Mackay project literally right across the river from STP took 8 years to reach capacity conformance but they have (Suncor and it will produce for the next 50 years or so just like STP...think of that
50 years even
25 years show me a light sweet crude facility that proces that long from one property.
That said they have done everything else exceptionally well and with that comes value.
-Bought Senlac to help fund McKay for 90 million and has generated over 210 million in operating income since its purchase. (WOW pretty smart) i have heard on several occasions that they could still sell it for 120 million.
-Built process facility at McKay on budget actually under except they built extra capacity not in original plan 460 million (some value there) the plant is very efficent again it is the conformance that takes time and it will in time conform .
- First Rail deal 5 year 500 leased rail cars in a market where rail cars are backordered 2 and 5 years, 400 of which they have subleased patnership with CN to ship from Lynton to Natchez(again some value there).
- Storage and Marketing deals with Genesis Energy at Natchez (again value).
- Just again lined up credit facility for 150 million canadian when needed.
- I have never seen a junior with so much interest from the USA and Wall Street , largest Shareholder Sageview from Connecticut with 41 million common shares(
Sageview Capital LLC is an American investment firm with $1.4 billion of assets under management. The firm was started by Ned Gilhuly and Scott Stuart, two former members of the Kohlberg Kravis Roberts Executive Committee) - Largest Bond Holder in the Debentures with an investment Value in STP of 30 million Third Avenue Management, LLC 622 Third Avenue, New York, NY 10017.
I could go on and on but in the end I believe it depends on your investment time horizon.
As Analysts at Raymond James have stated :
Bruised, Battered, But Not Broken
Event
We are resuming coverage on Southern Pacific Resource Corp. (Southern Pacific) with an Outperform rating and $0.75 target price.
Recommendation
While we expect the next few quarters could be highly volatile for the share
price, we do believe the McKay project is at a turning point in operational
performance and believe there is meaningful upside to the current price if the
company can demonstrate improved results. Therefore, we recommend the
stock at its current level to investors,especially those with a higher risk
tolerance.