RE:RE:Disappointing showing today by IAE ....
things do look like they are going iae's way with the price of oil on the rise. however, as mentioned, it did not have a great day today, or lately, from the technicals it shouldn't have had much resistance running up to the low 90.s yet it seems stuck here.;
with all the fist pumping going on here i'm just going to put a few things into perspective here.
first off I find it a wee bit disconcerting to see rbc as a big seller especially today as they are one of iae's main bankers and were iae's market maker in europe before they flew the coop and passed the baton to cibc i believe it was( a bit foggy on who it was). the rbl is up for redetermination which should not be a problem but ya never know these days.
as far as management goes, think what ya want, lol, i don't think a lot of them considering all of the misses they have had over the past few years along with seemingly not beeing all that forthright at times. they are still a show me stock for a lot of instituions due to the past. as far as malcy saying they are great, lol, i'm sure they've paid for a lot of his scotch and obviously his trip.
don't forget iae's past, wasn't that long ago they bought the sumitomo production and took over valiant supposedly running production up to about 14-16,000 before the 2500 sumitomo buy, and now they are at 9,000 boed, sooooooo that doesn't help.
one thing management has not been too talkative about is the cost of shutting down these smaller fields. it was only back in 2012 i believe when athena started and now it is done.
as far as a takeover, the only way i could see it is iff they split the company into stella and everything else, i can't see a major wanting to deal with all the smaller bits, and even stella itself may not be big enough for a large major, which are about the only ones capable of buying assets these days. don't forget stella was discovered years ago by chevron and they walked from it because it wasn't big enough for them. very few if any intermediate oil cos. out there able to buy. maybe delek does but i only seeing them interesed in stella. hope i'm wrong, lol.
don't forget the hedge goes down to only approx 5000 boed in june for the next year, it does look like it could be decent timing but if oil dives again all of stella is unhedged. you also have to expect at least some glitches on start up etc.
it is a compelling story and after the last quarter they did show they were able to pay some debt down without monetizing much of the hedge and selling assets, which was the case in previous q's. it is the main reason I bought in. I am holding 50-60,000 shares at a cost of approx . .60.
I really don't see dougs scenario of oil rocketing for a number of reasons, i do see it going up and maybe settling in the 50-60 range. my main reason for this is the fact that as soon as it gets much higher the low cost producers will hedge forward in droves capping the price basically. over the next decade we will see more and more renewables replacing carbon so imho it will be a continuous battle for market share as the market peaks and eventually starts a reversal. we will see spikes, maybe towards the end of 2016 but i doubt you will be able to hedge when it happens.
I'm holding for now but will probably be out just before stella starts up, unless we have a gowronggekko takeout, lol. sorry for the drivel, lol.
cheers ferret