GREY:STPJF - Post by User
Comment by
ShatnersRugon Mar 06, 2014 9:58am
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Post# 22288226
RE:Short Position...
RE:Short Position...
Sorry, I didn't complete my thought on the subject.
The buying of the 2.6 million shares was NOT short covering.
The short covering that will occur, and its associated positive effect on the SP is still in play. It's not a ludicrous amount of shares (just ~4 million), but the share price will jump for sure once it starts.
When? The first catalyst will be Stephen Harper's government's TENTATIVE approval of the project later this month. After the First Nations negotiate a better deal for themselves [make no mistake about it, the only reason that they are raising a stink over the pipeline is because their cut is too small - all posturing], the official green light should be given around June.
The second catayst will be the May update. ICDs will be in full swing with the announcement that more are being installed. During the Feb 10th con-call , Lutes said that the cost to install them was 'minimal', so no worries on that front.
The catalysts that have a low degree of predictability with respect to timing are the strategic review and the Keystone Pipeline approval. For me, Keystone is not a deal-breaker for STP given the very favourable rail deal that they have in place. Make no mistake though, it will happen. With respect to the strategic review, this actually gives me the least amount of worry. The banks are already on board as shown by the easing of the terms in place, and the worst case scenario is that they borrow some more money until production ramps up. Who knows? Perhaps by the time the May NR comes out, they will b e at breakeven. Yeah I know. Shatner's been caught in the transporter beam for too long. To that I say do some research on ICDs. There are MANY papers out there outlining their efficacy. And if 2P1's results are any indication of what is in store for STP, breakeven production(or near breakeven) can actually occur by May.
Further topics to be covered for this weekend:
- production forecasts for the next couple of months
- US Oil Production and its eventual decline