Post by
mrmomo on Aug 12, 2020 12:07pm
Great week for Crew!
With the after effects of PPony being taken out, the whole sector has enjoyed a RENEWED enthusiasim and investor excitment. Even though the offer for PPony was dissappointing (used mildly here), it seems that Crew s/h have been the net beneficiaries of this event, even more so than the PPony holders.......of which i am the proud owner of both.
The question therefore is this, is there truly a reason why Crew's shares have been pushed higher than the average or more than normal? Or is this just a case of FOMO gone wild only among investors? At this point, i'm not really sure. Why? Because as FOMO is truly contagious among the investing public when it's fully reved up, it is the same phenomenon among companies or sectors when it's time for drastic changes or transformations. Just as it is the case in the Canadian O&G sector, you don't want to be left out with no dancing parnter at the prom or leaving the party empty handed. Once the dominos start to fall......
Imo, it's too early to tell if there any real substance behind Crew's rise. Though it still remains "one" of my top candidates for being bought out at some point, their strongest asset is also their greatest roadblock to this end. The mgmt team behind Crew, though a solid crew are staunch supporters & believers in their company and actually have skin in the game.......unlike PPony team. And this my friends might make any possible discussions regarding buyouts or mergers difficult if not complicated. Becuase as many of you are aware, or should be made aware .......CREW is a survivor and has always been so. But as it is the case with all things.....everything has a price and i'm certain Crew's team has theirs.
With Canadian Natural's takeover of PPony, it paves the way for someone like Tourmaline (who imo they or Topaz were a more natural fit for PPony) to take a shot at the second best option for the company.......which is Crew. On the downside and what we can take away from what CNQ offered PPony, it does not bode well for the small guy looking for options or a way out. At an atrocious 69 Canadian pennies a share for +6tcf of P&P or .45 per boe!!! things arent looking good for anyones else conisdering this option. The only hope for others like Crew here, is that either this offer by CNQ was "strategically planned" with the assistance of PPony mgmt or it's an isolated event which will hopefully not be repeated. This with a continued rise in NG prices should make it more amiable for these companies looking to sell assets or the whole company. But as we all know.....it's ALWAYS better for suitors come looking for you than the other way around, the baragainng power & leverage is so much more when you know someone is thirsting for something you have.
Anyway, that's my 2 cents here. Aside from what i stated above, i would caution anyone looking to jump in at these prices without fully realizing the risks. Apart from the sector risk which i mentioned, these markets are quite high especially considering the great economical damage this viral epidemic has done. imo, something is out of whack here and folks should be conscious of that fact. In addition, this a an election year (and quite a pivitoal one at that) and in about 2 months the political & economical makeup of the continent could drastically change on a dime. The implications for North American O&G are enormous, infact not only for the energy sector but for EVERYTHING & EVERYONE......should Trump be defeated in November.
Good luck to all.........
Comment by
BeatTheOddsSqua on Aug 12, 2020 12:37pm
Momo...in your analysis of the PONY disposition, I was wondering why you presented the 2P reserve metric? From my experience, that reserve valuation is seldom if ever referenced when buying or selling assets. Just curious, but if it was meant to be inflamatory I understand.