RE:WCP days numbered? You are not the only one thinking this. I think it's becoming clearer everyday that consolidation is on the horizon for many of Canada's E&Ps.
My thoughts about WCP have been very similar to yours. It's been a well run company, low debt, interesting assets, and churning out large amounts of cash. Likely could be easily integrated with a larger player, with some assets sold off (eg, carbon capture). I haven't done the analysis, but would not be surprised if the sum of parts is greater than the whole.
I would completely understand if Grant and board were to sell or merge. Eventually everyone reaches a point where they realize there's more to life.
I actually firmly believe this is why CPG went out and gourged on assets and debt. Bryska and board see mergers are coming and have decided debt, large float and a posion pill, is their best way to retain their seat of power and personal wealth.
2024 is proving to be a tumultuous year. I think the skies should be brightening up by month end or early March.
GLTA. Enjoy the dividend payout next week.
mrmomo wrote: If i didn't know any better, i'd say that WCP is setting themselves up for an eventual merger or total sellout......whether intentional or not. The way the stock has been behaving over the last 12 months and the mixed signals coming out fom Wcp mgmt, i would not be surprised to see some bigger fish than them .....take a run at the company in some M&A deal. Why do i say this? Because for several reasons, some of which i i touched upon in the past.
First & most obvious, is the stock's under performance over the last 6 months. While granted it has followed other O&G ep's. more or less, and the sector in general during this downturn, when compared to its TRUE peers.......it's a little.....let's say ......questionable. While i don't expect for WCP to be the top performing stock, i did expect for mgmt to at least defend the integrity & value of their stock , to some degree. As most of their TRUE peers have done. You see, i always viewed Whitecap as a predatory company, the same way i view someone like Crescent Point & Arc. And they have been predatory for the last few years, when it came to M&A. Just like their sister company, Crescent Point.
So while you can make a case of WHY Crescent Point is trading where they are trading now, why is Wcp underperforming.....with no reason? Still baffles me even now. I'm sure many here will come up with their own ideas or excuses of why Whitecap is trading at these low levels, i'd probably wouldn't buy it.......because i've already considered almost every possbility ....all except for one. One that i didnt think would come this early in its journey. And that's someone taking out Whitecap before their time.
You see, i always thought that the end game for Whitecap would be for them to merge with someone, a merger of equals, most probably Crescent Point at some point in the next 5 years. But not before at least 3 more years.....at the very earlist. Was i a little off here? Maybe.....by the looks of it. So this underperformance along with the mixed signals from WCP HQ and the lack of consumating another M&A to soldier with their original "grwoth" plans, like CPG has done recently, leads me to believe something has changed. Is 2024 the end of the road for Whitecap & their s/h and an exit strategy from mgmt is on its way? Seems like imho. But i'd like more confirmation for this from mgmt and their objectives & intentions for 2024. Even though i'm not a WCP s/h....i'd still would like to know for my own personal motives & interests.
So if i'm completely on point, on target here, like i usually am with Canadian M&A, who could possbily make a run at Wcp and be interested in them? Imo, i could see only TWO possible scenarios. Given that they aren't defending their share price and CPG is done for quite some time in terms of aquisitions, there could only be one possibility........And that's Arc. They are the only ones who would have the financial resources and capacity to take on someone like Whitecap and aslo be interested in their assets.....and being able to make a deal which is agreeable to both parties. It won't be cheap....but i don't think Whitecap will sell itself to someone like Canadian UnNatural for peantus either.
Imho, Arc fits the bill perfectly here. As someone like Whitecap is EXACTLY the type of acquisition the guys at Arc are looking for them to conitnue supersizing. Big production, Big infrastructure with depressed valuations OR cheap lol to be blunt. This is more or less what SevenG was when they were acquired by them, so the MO here is almost indentical to a tee......The only question remaining is at what price WCP will be sold. If i had to take a wild guess, i doubt very much WCP mgmt let this go for anything less than $50k per boepd.....or $10/share with debt. And this would be an excellent move & acquisition for Arc.
Will i be right again here? Let's see what the folks at WCP have up their sleeves...In the next few months we should get a good idea exactly where this is headed.....
GLTA