RE:RE:Trading eod and Nat Gas move in late afternoon
The reason i returned is this;
I do think the entire production base is realitively high quality, not just a few specific regions of production. The operational costs have really gotten a lot better, and they do have capacity to ramp up production quickly. Every time they tell me how green they are, i think about how much green they have wasted.
In an enviroment where there could be a natural gas shortage, they could easily put their extra gas plant to work and add boe's very quickly. The need to say that is my opinion.
I however think that their balance sheet i am concerned about the amount of debt, and the cost of that debt, however because of their large cap status, they get away with it.
They are going to generate a lot of cash, however in todays interest rate enviroment their debt is not cheap. In the high 7's low 8's they should be coming up on everyones radar screen.
I really don't like the 30% hedge they put in place for condensate, at 60 dollar oil it will cost them roughly 15,000 *15 *90 = 20 million US a quater or 25 million Canadian, a hundred million for the year.
Bad Bad Bad
IMHO