RE:RE:RE:RE:Baytex vs Crescent PointPlease tell us why you would change horses mid stream and buy into a company that has half the netback of CPG as well as half their NAV ?
We all know BTE has been a darling and CPG in investor bad books. I'd rather own the company that can make $$ with lower oil prices than the other way around.
All CPG has to do is chop capital expenditure for a while then use the savings to buy companies that are bound to fail if low oil prices continue for any length of time.
i strongly belive this correction is being orchestrated as a result of the latest IMF report. The market just needed a good reason to become volatile again, and the IMF report gave them that.
Bottom line is that oil is expensive to get out of the ground. Companies that had $30 netbacks, will not be making any profit and will have no choice but to cut expenses ie drilling. Resulting in a huge upheaval in the entire economic system across the world. It's no secret the U.S. wants to punish Russia and one of the best ways they can do it is by trying to mess up their economy, reducing their cash flow from fossil fuel sales will surely help that, along with the major oil companies pulling out of Russia.
Yup it's going to hurt everyone else is the process, but strong companies with high netbacks will survive and come back even stronger when the game is played out.
There is no immediate replacement for fossil fuels in the near future, so demand isn't going to fall significantly any time soon. But production and capital expenditures will fall, resulting in higher pricing.
I know this situation is scary for those that are fully invested in O&G, but one thing I've learned over the years is that selling into these micro economic scares is a sure way to loose your money and pass it on to the big boys.
If you think everyone is going to stop using fossil fuels hence forward then sell, else sit back and watch the carnage until such time as the players have finishing playing around and let the price go back up so their buddies can make some $$ again.
Thats my 2 cents worth...