Athabasca Oil Corp T.ATH

My take

[Mindset]

Its a imperfect deal in an imperfect world.  No one is in love with the deal they just made, but it does put them in a better financial place TODAY. Down the road it may hurt them, but this makes them stronger for the REFI, which is the most important issue to deal with. 

They could always hedge out the WCS/WTI spreads which would protect them and offset the protection they gave up. 

Line capacity is increasing, so this should help narrow the spread, especially when TMX opens. 
Also who knows when TMX will open, expect delays. Sometimes a bird in the hand is better than two in the bush.

With the unrestricted cash, $265ml as of yesterday, they could make a big dent in reducing the $400ml coming due.  If they get better terms on the REFI, this could further reduce restricted cash and more importantly limit their hedging to 25% or less.  Remember $5 increase in crude = $70ml unhedged.

FCF is running about $25-28ml/q, so they should be over $300ml in unrestricted cash by year-end.

Assuming $100ml FCF in 2022, they could easily buyback 10% of their shares easily, initiate a 5-10% dividend and reduce their debt.

[EstevanOutsider]

The thought of this co having a div is comical. They are a near term insolvency risk. I suspect debt gets repaid but after that not much left in pot. Hangingstone is the top 2 worst SAGD projects in terms of economics. Feel the pain of $4 aeco. Management hasnt bought shares in yrs. Tells u everything u need to know.

[ComradeKomissar]

I beg to differ. With a quarterly FCF of $28M a year, there is plenty left in the pot. I suspect debt gets repaid but after that not much left in pot.

[EstevanOutsider]

They are hedging 50% of their volumes. At $4 aeco and $60 they wont have that much FCF. Athabasca needs a better oil price otherwise survival will be meager, assuming they do.

[riski]

This is the simple truth.  ATH has a high profitability floor.  They don't make any money at $55.  They have meagre profits at current strip, but not enough to sustain or grow the business.  If oil averaged $60-$65, the share price would grind slowly down until someone mercifully bought them out for pennies.   On the other hand, above $65, things start to get

[AllInOnOil]

I’ve noticed Oil prices have gone up and down with each Covid wave. As much as I don’t want to admit to a 4th wave, it’s here! I fear oil prices will continue to slide downwards. 

[ManitobaCanuck]

  Come on Estevan aren't you the same guy who predicted bankruptcy for this company in 2020 when it was at  18/20 cents . I bought then when you predicted the sky was falling and I made a million on this . The inherent value is approx 2$ and even if they are liquidated/taken over at 50% price we still make money . I know there is a fourth wave but as Israeli data shows ,it

[EstevanOutsider]

Yeap. That's me. Only went up because of Eric Nuttall. No other institutions or savvy oil people (or insiders) touched it. You arent out of the woods. This company is selling precious pipeline capacity. I watch the story out of interest but I don't believe in the management. Let's see.

[Mindset]

The more people think like you the greater the return when they complete the REFI.  Music to my ears. 

[Maxmoe]

Hahaha, yup, I remember that guy crapping on Ath and nuttall for buying it at 18. Meanwhile he owned parex at 18 which did zippo ytd compared to his dead wrong call on bte and Ath which went up , hmmm, triple?  4 times? Bahaha. Only went up because of nuttall? Hahaha. LoL. Sure didn't help a single one of his holdings in 2020.

[cahclick]

Welcome back grumpy Hope you had a good summer holiday.  

[Nothingmatters]

Grumpy came with a bang.. was waiting..took a small position today. At no gain no loss. Let's see

[EstevanOutsider]

I may have owned Parex at one time but I wouldn't touch it now. My big play was on Trican and Whitecap post scamdemic recovery. Yeah, I don't think I got the call on Athabasca wrong. I reiterate: the stock is ONLY going up because of Eric Nuttall. You can thank him. That being said, the company is not looking good unless oil prices go significantly higher. $65 doesn't do anything for

[Tartar3]

Basically you're saying this is a highly speculative stock based on the price of oil, I think most would agree with that, but if those calling for elevated oil prices over the next few years are right, this maybe the place to invest some of your $$$

[MrICE]

We're definitely highly speculative based on the price of oil. "Unhedged annual EBITDA sensitivity of ~$70 million for every US$5/bbl move in oil prices." didn't we just go up $5/ barrel last couple days 

[Maxmoe]

Hahaha, good one. Funny how braggadocio turns to oh yeah I sold that. You know anyone can go back and read your posts from January bashing Eric and Ath? Pumping parex just months ago?  From 18 where king Eric bought Ath, it's been by far, the top performer in his fund if not the entire oil patch. It's because of leverage, not because of Eric. Face it, you were, and still are, WRONG

[ManitobaCanuck]

Maxmoe , what target do u expect to see Athabasca Oil in next 2-3 years  

[Maxmoe]

Years? 2 or 3 years? I'd bet big money if I say my target is 2 or 3 bucks there will be screaming if it doesn't happen in the next 2 or 3 weeks. Or days. Not by you of course. LOL. Leverage is a two edged sword so as long as I expect it to work in my favour I'll own Ath. I see no reason oil will collapse so I'm staying long. For how long? Don't know. Years not months to go is

[riski]

Well you will need WTI to be a lot higher AND stay a lot higher for that to happen.  It might happen.  Or it might not.  There is a lot of risk here and management that is not shareholder friendly.  I don't think anyone is disagreeing with the possibility that this could go higher in a sustained WTI scenerio above $80.  But then again, capital invested in all these

[masfortuna]

Wrong.  With wti at $65, over the course of the next few quarters, you will see the sp increase.  The price of oil does not have to increase any further for it to appreciate in value OVER TIME.

[ComradeKomissar]

Wrong.  With wti at $65, over the course of the next few quarters, you will see the sp increase. Don't think so. All these companies are priced as if WTI is $47, so there is an inherent discount.

[ManitobaCanuck]

We all are discussing about WTI here,Remind me again , doesnt Athabasca get WCS rates ?

[Nothingmatters]

Folks are actually saying the same thing but pointing fingers at each other lol..

[Mindset]

The longer the Mexican outage, the narrower the WCS spread should get. Mexico does have inventory to provide cover, but if they don't restart production by next week, it should get really good for WCS. Plus Biden will look real bad for canceling KXL. 

[Maxmoe]

It was a bad decision to kill keystone and import oil from elsewhere in the world. He and most Americans assume cdn oil is squeezing out USA domestic production vs displacing imports from overseas. To be fair USA production was on a tear until very recently and they quite frankly didn't need our oil. Someday they will figure it out but not until their feet are held to the fire. In the meantime

[EstevanOutsider]

Just be clear: WCS is a grade of oil but sold at different points. Athabasca just sold their egress on Keystone which brings oil to the USGC where you have "WCS Houston" exposure; instead, opting for WCS at Edmonton, I think they call it WCS at Hardisty which is more prone to differential blowouts. That may be minimized with new pipeline but the risk is there.  

[EstevanOutsider]

I never pumped Parex or bashed Nuttall but yes, I did and do cont to believe ATH is trashco #1

[Maxmoe]

Stop embarrassing yourself. You posted this gem below on Sunday, aug 22. Stock closed Friday, aug 20 at 67. So, indeed, "let's see". Seems to me you should get your head out of estevan move to friendly manitoba. Let's see. 97\67 that's a gain of 45% you missed shooting your mouth off. Even better, you were short and lost 45%? Man, you suck at this. Ath you "watch out of

[EstevanOutsider]

LOL, fired at Athabasca? Nope. Only worked 8-months in the oilfield and that was in Saskatchewan. I do own some of his Ninepoint Energy fund. I think they sold this stock. As for me, yeah, I could have made more on this POS but I did well in other energy names which I continue to hold and can continue to sleep at night.  

[ComradeKomissar]

this will pass in a few weeks and we will see oil test 70$ again towards end of year.   Agreed. OPEC may delay bringing in the additional 400K barrels a day while the Fourth Wave rages, and I don't think there will be an Iran deal with this administration. 

[Maxmoe]

The 4th wave is referred to as the Darwinian wave. Idiots that are anti mask and anti vax will be removed from the gene pool. The 'base' of trumptards will keep eroding. I would have, could have, should have, sold at 22 when my 11 cent purchase doubled if I payed any heed to schmuck day trading flippers that got this one WRONG all the way up.. But I didn't. Same when it doubled again

[masfortuna]

LMAO MAX! I am not sure what everybod's rush is. I am looking at a 3-5 year hold on this. Then we will see.