RE:Pretty decent quarterMore of the same in my opinion. Spending way more than we bring in.
a loss of (.17) and net debt is now over $4.4 billion or $4.75 billion if we count foreign exchange hedges (see below)
- BELOW is from last few pages of news release.
The following table reconciles net income to adjusted net earnings from operations:
Adjusted net earnings from operations ........63.4 ...............0.12
Net income (loss) ......................................... (90.7) ........... (0.17)
The following table reconciles long-term debt to net debt:
Excludes:Unrealized foreign exchange on translation of hedged US dollar long-term debt of.......................... (343.4)
Net debt........................................4,409.3
Netback ($/boe)
Realized gain (loss) on derivatives ........(2.21
Netback ....................................................... 32.28
Funds flow from operations ........................ 428.9
Capital Expenditures Total ...........................733.0
bumblebee99 wrote: Nothing spectacular, but a solid quarter.
I like the asset sale and I like the fact that they will exit 2018 with debt/ffo of less than 1.9 - not including the asset sales.
I also like that their capex is slightly ($25 million) under budget. Normally, they wouldn’t have cared, but it shows that they’re trying to finally save some shareholder money.
What I don’t understand is why they see the need to hedge so much. If they were severely indebted, I understand their banks would want them to hedge aggressively, Why be so conservative? Even Cenovus is going to give up their hedging plan soon. They should emulate CLR, which doesn’t hedge at all.
Hedging is expensive and over the long run, studies show that it is actually a less successful strategy than not hedging. Their hedges will cost them $300 million this year, money that could have gone to lower the debt. They’ve even hedges 50% of next year’s production!