Prairie Provident Resources Inc T.PPR

Prairie Provident loses $ 9.9 million in Q3 2021

[danstock99]

Prairie Provident loses $ 9.9 million in Q3 2021

[Anthdino]

How

[Justhalffull]

Foreigh exchange losses, forced hedging, lower production.  All as expected.  But drill results providing increased production will provide additional cash flow, which is what PPR is all about.  Profits are a long way off with over $120 million in debt.   Cash flow will be the driver.  Don't expect dollars per share.  Be happy with 25 cents.

[Anthdino]

I'm a little surprised by these numbers. Figured with the new wells drilled . They would be getting full price for the oil without bejng hedged.

[Amameal]

Yes, net loss is not as bad as it looks. As the PPR share price went up, the outstanding warrants got more valuable. I assume PPR recorded it as a loss for the warrant's value appreciation. Vice versa, it will register as income when the PPR share's price drops.

[Anthdino]

Seems smart!

[Amameal]

Even though I did not see a single word of cost-cutting and running a leaner operation, the management should still try to reduce costs. So, we are in good hands.

[filefish]

Justhalffull, your comments are correct, but drilling sub 200boe/d IP30 wells is just  not going to cut it. The previous Princess wells were much more prolific. They are on a treadmill with a steep incline. Bad hedges expire on 12/31, with less bad hedges continuing in 2022 means a little more cash flow but low long can they go without the creditors pulling the plug. The only thing that may

[Justhalffull]

I don't think the 2022 hedges are much better than the 2021s.  And they even have some 2023 gas hedges in the 3 dollar range.  See page 22 and 23 of their q3 financials on SEDAR.  A NAFTA settlement of $30 or $40 million would do the trick.

[filefish]

I am not counting on a significant NAFTA settlement. Its already been in the courts way too long.  If they happen to get anything at all it will probably be immaterial. Thats just the way it see it. They will have to continue to slug it out in the finanacial trenches with the lenders.  

[Justhalffull]

I don;t disagree, but we don't have much more than hope for NAFTA.  I lived in Quebec several time, and understand their political bent. I do, however, think the Quebec decision did cause some financial harm to Lone Pine.  How much, I am not certain. But the case has certainly been dragged out far to long, why I have no idea.

[filefish]

As of 12/31/2020 PPR  had $857mil in tax pools. At a 20% tax rate to a company generating enough net income the tax savings is more than enough to cover the PPR debt. Thats is why I am thinking more in terms of that kind of bail out than on the NAFTA settlement. Who knows? Even if oil/gas prices remain strong in 2022 and nothing else comes up, we are looking at .25/share being the best upside

[pennydredful]

Other  companies  do  not  need   these  pools   and   there   is  a glut of them available  if  there  was any  demand fo them.