RE:RE:RE:RE:RE:Free Funds FlowTheRexmember wrote: Best of luck. Obviously a few people are agreeing with you today.
Very different comanies. Co2 floods and water floods reduce decline rates at CJ but heavy oil is also worth less. And under pressure right now.
bne is lower decline than than average. Higher decline than CJ.
CJ 1.1 billion market cap, 1.2 billion inclding debt for 60% higher production
BNE 230 million market cap - 380 million including debt.
higher quality oil. But more gas.
nothing special about market behaviour of CJ. Better balance sheet maybe but it also fell in lockstep with BNE until this week.
Relative valuation of BNE is less than half of CJ.
The biggest risk is a takeover at these prices.
Yes they are different companies but at the end of the day i am not going to fall in love and ask either one to marry me i am just trying to see where i can make some money.
BNEs dropping shareprice is not really my concern as they are all dropping with lower oil prices. What it comes down to for me is how much Free Cashflow a company has and how much debt they have to pay off which will tell me how much they Cash they can give to me.
In comparison CJ with a current market cap. of aprox. $1.15 billion and under $50 million in debt. will have Free Cashflow next year at $80 oil of aprox. $150 million after Capex. Bne at $80 oil with a market cap of aprox. $230 million and aprox. $160 million in debt will have aprox. $60 million in Free Cashflow after capex.
So on a market cap. vs. Free Cashflow basis BNE is currently valued at aprox. half of CJs. IF oil prices rise next year BNE will likely do better than CJ in regards to shareprice. If oil stays in this range CJ can pay their 10% plus current dividend and break even while BNE will have aprox. $45 to $50 million in Free Cashflow next year after capex. Considering that BNE currently should have aprox. $160 million in debt and are forecasting debt to be down to aprox. $120 to $125 million by the end of next year they will need aprox. $35 to $40 million of that Free Cashflow for debt reduction which means they will not be able to pay much of if any dividend next year at current oil prices.
I am not trying to tell anyone what to buy or sell as it depends what you are looking for. For me i am looking for a low debt company that can pay a nice dividend. That is why i sold most of my BNE shares today although i was not holding that many to begin with and bought some more CJ.
To be honest if oil prices rise and CJs shareprice along with it i will likely dump some or all of those shares later on and put the money into some more stable dividend stocks as i am really getting tired of these boom and bust oil stocks. One day these companies are making huge money and then boom a month later they are another $10 decilne in oil prices away from making nothing. Then there is always calls for $100 plus oil and which tends to happen on occasion and then it seems to quickly drop again as it has twice in the last few months.
And that is why i will go with CJ as i have been hearing calls for high oil prices for years but over the last 8 or so years last year was the only one that had high oil prices. IF oil prices rise a lot next year BNE shareholders may make a lot more in shareprice appreciation than CJ shareholders but to be honest i am tired of waiting for high oil prices that last a long time and just want my monthly dividend that can be payed at these lower oil prices even if it has to be reduced a bit if oil prices fall further.
If i wanted this much aggravation i would get a wife.
Good luck to all.