Cheap Enough Yet? Summer doldrums certainly setting in. Someone over on an IV board said that if you 'buy in June you've bought too soon'. So far he is right, but how much cheaper do we have to get?
I think that RMP are biding their time and are focussing mostly on drilling a few Ante Creek wells earlier rather than later this summer. Here are my thoughts on why:
1. Preserves capital for the summer, just in case there are any cost overruns on the new Ante Creek - Waskahigan pipeline.
2. Prove up their Ante Creek lands to reinforce why they are building the pipeline in the first place.
3. Large flows from Ante Creek wells are the easiest way of keeping the production volumes up.
Ignoring the June buying moniker above, I have picked up 200 so far for junior's RESP today. I just don't see RMP hitting 4.00, not in an environment with:
4. High WTI. Just compare 2013 prices with those in 2012. WTI doing much better in 2013.
5. Low differentials on received oil prices. As noted in my last post, the spread on the best quality Alberta oil is now at zero.
6. Higher US dollar. We are under par, so $Cdn netbacks have increased.
7. 2013 gas prices are way higher than 2012. While the price has been slipping in the last month, it is still better than 2012.
As always, JMHO
L6