RE:RE:Informative posts on GXE on BNE boardI posted this on Cj board as oilpants was trying to pump his fantasy GXE and Cj merger....
What I am saying is more likely:
Well predicting mergers is always just that a prediction...if Gear Energy is too merge with any company I think it will be Petrus Resources.
Gear and Petrus are run by the same Chairman Don Gray....he also own alot of Peyto.
Sure he could merge Petrus into Peyto but merging Gear and Petrus would solve each companies problems.
Gear - lack of economic light oil drilling opportunties. I mean the reason they merged with Striker was too get light oil opportnities only the ecomimics on striker's sask stuff need 65 plus WTI. Lack of light oil and drilling these wells with low reserves (cheaper) is why Gear keeps getting it's debt faculty trimmed...those heavy oil wells have relatively low reserves per well...need to constantly drill.
And Gear could even use some natural gas opportunties as diversifcation.
Petrus - massive debt. And they are going to be forced to do something as they owe 36.8M in July second lein loan...and have like 110 million in total debt. Repaying it is so slow as they can only FCF 1-2 a Quarter. Petrus needs either a capital injection or merging with a company with high FCF...Gear would help Petrus with this.
Petrus has phenomal Cardium land..up with Yangarra for quality land....they just are too leveraged too drill. They could offer Gear a pile of good drilling locations of light oil with NG and NGL's....wells that are more long live and better for a debt reseve faculty.
Pretty obvious both Petrus and Gear have to make a move..question for Petrus is merger with Peyto or Gear or neither and a refinancing...
The Gray brothers bought more shares of Petrus in March and control 50% of it.
The other odd thing is Petrus Ceo recently resigned and he was doing a good job...they didnt have money to drill but when they did they hit very good wells...400-500 Boe aday.
Puzzling...
Petrus also had 175k shares trade today and they are a thin trader....and they are 52 cents a share. Makes no sense for Petrus to hit a daily high today...they are so in debt to the balls.
But Gear and Petrus would be 1-1 now based on trading price....
Time will tell. If this merger ever happened I would consider buying shares in combined company. I love Petrus land but debt just scares me too much and they cant afford to drill.
swingtrading wrote:
Randal there seems to be a buzz about this stock on CJ and BNE boards. Been researching Eric Nuttal examing his fund and he is on a streak of good luck. What I noticed was both The Seven Generation and ARC Resources before there merger were in his fund so he might have his ear to the ground? Makes me think more about his two latest fund inclusions with Cardinal Energy and Gear Energy. Need to look into this more to see. There is a discussion about a merger involving CJ/GXE.It is a bit confusing to follow but I understand the gist of it.