Post by
JohnJBond on Feb 10, 2022 2:31pm
OBE v CPG
This morning I went over CPG's info.
Its been a while since I held a position, in CPG.
Now that OBE has exceeded CPG's share price, I thought it time to take another look at CPG to see how it compares with OBE.
I was surprized.
First, CPG is less oil weighted - at about 58%, vs around 70% for OBE
Second CPG has hedged its 2022 oil at about US$68 upside. They claim about 45% hedged on a BOE basis (but it seems to be mostly oil focused, and looks like they've hedged about 59-69% of their oil). Their presentation and news releases seem misleading on this subject.
Third OBE is forecasting much higher growth than CPG. CPG is another example of a company with 130,000+ BOE that is spending hundreds of millions in cap ex to keep production more or less where it is.
OBE is so much better in both respects. OBE has more oil (nat gas prices are generally softer outside of winter, so at this point in the year, one is better off with lower gas weighting). Given the strong oil pricing, and expectation for increased oil strength during the year as we exit the pandamic, one is better off with more oil.
OBE is way better on the hedging front - it may even be the best in the sector. They clearly state their hedge book, and they use a very short duration approach. They achieve maximum pricing and smooth out a bit of the day to day volitility.
In terms of who will get the biggest percentage and absolute cash flow increase with higher oil prices, OBE is well ahead of CPG. Unexpectedly so far ahead.
In other respects, like debt per share; debt per cash flow they are similar.
This isn't intended to bad mouth CPG. Its a solid company, and its shareholders will likely be better off a year from now, than they are now. I was just surprised when placed side by side with OBE, after OBE's recent share price jump, that rather than being reasonably similar, OBE seems positioned for much better share per share results.