Athabasca Oil Corp T.ATH

Nothingmatters

[BLACKJACK86]

Try to elevate the discussion, I could do without the insult.
I am not posting much, but i've been a shareholder of Ath for years and on this board for a long time, so please show a little respect .
Just sharing my ideas , like all of us here .

[fellowship]

BJ it is not possible what you are proposing. Dilution is impacting shareholders in all situations.

[BLACKJACK86]

Fellowship it would be dilution if you issue share without touching the debt , but here I'm saying replacing the debt with share .

[BLACKJACK86]

Actually, I should have said that it is not dilution VALUE wise, but yes share wise  yes it is dilutive 

[Nothingmatters]

Theres nothing to elevate here. If your arguments would have been logical then yes.. unnecessarily wasting stockhouse space and people's time. Stock dilution will wreck the shareholders and this company would never recover.

[masfortuna]

Ok so assuming we have an additional 400 million shares purchased at today's sp by someone and then use it to pay down the debt, would the company not be worth 400 million shares less? You don't pay off the debt for free is all I am saying. The loss goes down to the shareholders as their shares are now worth 400 million less whatever value they had before. It's called basic dilution

[Chris007]

Heres just a quick mental excercise with relative valuation (Current shares outstanding vs. BJs dilution scenario) As per the company’s newest news release Assuming unhedged, breakeven of 43, with each $5 increment of WTI above yielding 70M in cashflow If WTI averages $65 next year 65-43=22 22/5=4.4 4.4 x 70= $308M in cash flow Using a 4x EV/CF Multiple that small cap peers are trading

[fellowship]

Yes, great numbers, please include projected cash on hand at end of the year. Should give a better holistic view. If dilution is the solution have nothing against that scenario. They need to source roughly 150M by the time notes are due. (asset sale could be in the cards with the impairment charge not reversed). 

[Chris007]

Net debt takes that cash into consideration...hence the "net"...fact of the matter is, noone knows what net debt will be at year end...lots of factors at play including if they manage to accomplish a more comprehensive refinancing deal that frees up restricted cash... As for an asset sale, thats always a possibility...but obviously prices aren't exactly good...definitely a buyers

[fellowship]

Definetely. One thing in common is that all companies are trying to monetize their assets to some extent. The reason I mentioned to include the cash on hand is because refi will be based on that amount. I feel management is prudently contemplating any of the scenarios and not to forget USD/CAD interest rate. 

[BLACKJACK86]

Good example Chris , l'm not disputing you're number , eps will be affected of course . But if you remove the debt ,you remove a risk and  the market will give us a higher multiple , so your share should not be affected. In fact , it could go higher since you are saving that 45 millions of interest. all company gets different EPS  multiple depending of many factors, a suncor will

[masfortuna]

Umm Thx Chris BUT if he didn't understand the "pizza analogy" I doubt he will understand yourr math :)  Kiss (Keep It Simple Stupid) Mate Mas

[BLACKJACK86]

Mas , one question for you, if we swap the debt for share at market price ,is the company worth: 1- same 2- less 3- more a simple question......

[masfortuna]

Blackjack dollar for dollar they will be the "same" today assuming you can get someone to buy 400 million shares and A) not collapse the sp B) take a 50% hit on the shares YOU presently own once the share count has doubled. Do you see the difference? 10 shares everybody has 1 = $1  company worth $10 dollars 20 shares everybody has 1 = .50  company worth $10 dollars I can'

[Chris007]

LOL...if stockhouse had a drawing feature to draw a pizza for the pizza analogy, I would.