RE:RE:RE:RE:RE:WTI up 9%, OBE down 2% at ~$10.57I don't follow Technical Analysis. I suspect the recent run up has attracted many Technical analysis types. The current leveling off, may give them reason to move elsewhere.
Every time we get new information, reassess.
OBE is a pretty simple company to analyze compared to others.
There really are two variables - production and price.
They've given us their production guidance, and as Kav has pointed out, you can get a good idea of what their recent production is like (t - one month). We can see the WTI rate, we know how much they hedge.
As long as they keep hedging etc the same as they have been, then we have a good idea of how a quarter is going to turn out.
They've budgeted about 150 million in cap ex for 2022, but are spending about 100 in Q1!
Q2 is break up so almost no money will be spend on cap ex during that quarter.
That leaves 45 million for Q3 and Q4. They've said they will increase this if conditions are suitable. ie, they have the money, and places to drill. I'd say conditions look extremely favourable right now, with no clouds on the horizon. That may mean another $50 million in Cap ex (or more) added to H2. Hard to see them not at 35,000 Boe by the end of the year.
Its equally hard to see oil prices crater over the year. Yes there may be some ups and downs, but there doesn't seem to be any way out of solid oil prices this year.
Seriously, how do you get oil back to $60WTI for the second half of this year without a massive black swan event?
35,000 boe by the end of the year, and $100 oil, add up to a much higher share price.
OBE is probably at 30,000 ish boe right now, and oil is $108
They are runing 4 drilling rigs right now. Spending $100 million in Q1 capex is really aggressive. That kind of aggression makes share prices move. They are about to have access to internally generated funds to put that aggression to work in Q3 and Q4.
Internally they must be working on getting locations and permits lined up for increased action in Q3 and Q4. Clearwater may or may not pan out on OBE's land, but so what, their bluesky resource is solid is basically the same thing, and just below it. Western Canadian Select is US$93.79 right now! The highest its ever been before was US$79.59 back in 2008 (when WTI was $147).
WOW.