BNE flirts with 52 week highs
BNE flirts with 52 week high when many energy stocks are down since June some more than 20%. Bonterra leapfrogged peers CPG and WCP and is one of the best performers YTD. A few other leveraged oil names have performed very well YTD but not as well during this recent energy sell-off. Board has gone quiet and usually we see here those that misrepresent or simply don't understand BNEs positive fundamentals when the stock had down days. Missed opportunity for some as BNE has gone higher and higher. In the current commodity pricing modelling $5 CF for 2022 is realistic as BNE has one of the highest CF sensitivities to higher oil plus $4 AECO is giving another overlooked boost to CF. BNE rise has created a lower cost of capital for any M&A and George understands that all to well. (BNE can now transact in both a deleveraging and accretive way if an opportunity presents) I believe this will occur at some point. Additionally, the market waking up to BNE being a first mover and restoring production while many of its peers stayed flat. H1/21 Drilling cost savings and higher production in H2/21 capturing $70+ oil and $4 AECO means upcoming Q will become a positive catalyst going forward. As for debt , at current commodity pricing D/CF will organically go lower to about 1.5X D/CF in 2022. As for the bank lenders, only one really wants out but cannot do too much without agreement from the other. More importantly at current commodity pricing most energy companies are paying down debt making it difficult for a lender who wants out to be unreasonable. That lender would risk a backlash within the whole energy patch, so for now most will be afforded the opportunity to repair the balance sheet over the next 12-18 months. As debt normalizes during 2022 BNE's stock will get another re-rating and todays stock price will seem cheap!