Veren Inc T.VRN

Precipice of an epic rally

[CashHungry]

Despite the recent pull back - mitigated by today's rebound - I am more optimistic than I was 10 days ago when my oil portfolio (I may was well just say portfolio) was at its all time high.  How a stock or sector performs in the face of bad news as oppose to good news is much more informative for medium to long term trends.

All oil investors should rejoice that oil stocks only corrected (prior to today's rally) by about 10% despite a major 20% drop in oil prices that slid thru several technical barriers.  There was no irrational panic selling and many investors wisely took the opportunity to enter the sector or add to their current positions.

In light of recent encouraging news, the prospects for $100+ oil next year is appearing far more likely as the Omicron variant threat fizzles, or maybe even turns into a positive by doing what vaccines were not able to do -i.e. achieve global herd immunitiy.

In my mind it is not whether the rally continues into '22, but will the next rally be as impressive as what occurred in '21 where returns were 100%+.  Right now I am 50/50 whether that will occur, meaning that by YE '22 I believe there is a good chance CPG could be trading between $12 and $15.  2 weeks ago, when oil was +$80, my upside forecast for CPG was only $8-10.

[BigJoe778]

Personally I think your estimate is a bit outlandish. I'll go on record and say we'll be lucky to see CPG at $8 by '22 year end. Still roughly a 33% increase from today's price and far more realistic based on how the market currently views this stock. Guess we'll have to wait 13 months to see who's right. 

[CashHungry]

Outlandish?  You really think so? First, my $12 to $15 forecast is based on oil getting to $100 next year, which I only give a 50/50 chance, although I believe the chances are more likely now than when oil was $80 because of several factors including a quicker termination of Covid lockdowns.  Omicron seems to be more transmissible but considerably less lethal.  If this is the

[Moernoney42]

this company doesn't need oil to go to 100 to see double digits.  what this company needs is a C suite that knows what the f they are doing and how to control costs to be as profitable as it can by your line of thinking. this company is worth 50$ a share if oil hits 1000$  live in today's reality. oil is at a good level. management corruption is what is holding this stock down

[Redfoxy]

Moern- you are right on. Have a look at the press release.  If I read it correctly they are saying that they dont like the share price as it does not reflect financials.   1. 50% increae in divident is BS.  If the price would have been 1 cent dividend and then they bumped it to 18 cents then they could claim a 1,800% increase.  See the stupidity of this line of thought by

[BigJoe778]

I couldn't agree more Redfoxy.............the change at the top really hasn't done much to change the market sediment. Yes.....they're paying down debt but so is every other O&G company in the sector. Suncor opted to pay down debt first before increasing the dividend in Q1 2021 and look at their SP compared to IMO and CNQ.......it never used to lag those 2 like it is now. Market

[CashHungry]

They needed to get their credit facility extended to 2025 which required them to lower their debt levels quickly and significantly leaving little or no room for an NCIB.  Now that task has been accomplished they now have more flexibility to return cash to shareholders - although the credit facility's covenants will place some restrictions on what is possible.

[BigJoe778]

Yes I really think so.....you're basically predicting the stock will double in 13 more months on a $20-30/barrell increase. We've already seen $85 WTI and it couldn't even break $7. Also are you factoring in the hedges for 2022? I realize that they are better for Q1/Q2 however they will still be taking losses for hedging at $90-$100 WTI. 

[CashHungry]

Um... On Dec 31, 2020  CPG  was $2.97 and oil was $48.52.  Today oil is about $70 ($22.50 higher) and CPG is $6.14 (over double the price at the end of last year).

[BigJoe778]

Yes and on Nov 8/21 oil was at $84.84(high) and CPG was at $6.14(high). So a month ago oil was $15 higher and CPG was at the same price plus there was a NR today.......so what's your point?

[CashHungry]

My point is if you believe in $90 to $100 oil and that CPG will meet its production and capital guidance and that the market will return to some level of sanity with regards to valuations then it is not outlandish to expect the stock to hover some where between $12 and $15 by the end of next year. I don't have a crystal ball, so I can not know for sure whether sentiment will improve next year

[Redfoxy]

Cash - if you read into my post that I am a technical trader then I misrepresented myself and miscommunicated my talents. I am neither a technical trader nor am I a sentiment investor (oif there is even such a term).  What I am is an oldtimer optimistic realist. Those latter two traits are always in conflict as I get optimist about CPG having ridden it all the way down from $42 per share or

[BigJoe778]

Based on fundamentals many say this should be trading at $9 right now however I made a call a few months back that I doubt we see $7 this year so I think my tools are working just fine. CPG hasn't traded according to fundamentals since 2014 so perhaps it's you that needs to check the tools you're using. I'll stick by my prediction or we'll be lucky to see $8 by 2022 year end

[JohnnyDoe]

little bit of a sentiment change for cpg to be 6.14 with wti at 70. Where do you think cpg gets to when wti crawls back to 85? with sustained 100 dollar oil, I'll be disappointed if cpg isn't above 15 this time next year.

[Redfoxy]

Cash- you cant have it both ways as CPG is so higly leveraged that it would be a total mistake to say " cpg was at x and oil was at y.  Now that oil is at 2 y, then if cpg gets to 2 x then we should be happy".  that is totally, totally wrong given the high leverage that CPG shares have to price of oil as increases accrue directly to the bottom line.   My thesis is that

[TheBridge]

There those who believe and there are those who don't believe that CPG has an opportunity to get back to something like it was a few years ago. The world situation has a lot to do with this and we don't control it from here. If crude price can mantain themselves in the $70 range and the management team continues on their current path of paying down the debt,  I think there is a

[Redfoxy]

Bridge - thank you for the kind words.  It is my intention to be around for a few more years, but who knows, perhaps the Big Lady upstairs has different plans for me. So can only say here today and tomorrrow - who knows. In the end oil will still be required for the foreseeable future and CPG should not only double or triple but I think a ten bagger may not be totally out of the question

[Moemoney42]

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