RE:RE:Spartan overtaking SGY todayWho cares about their $20M capex. This firm recently relaunched as a publicly-traded firm with the intention to grow very fast. It is not at all the same company as it was "only a few years ago"...it raised a lot of capital to become what it is...
Obviously, it has much less debt so it has fared much better. It is as simple as that: You can rank the stock performance of all Canadian E&P firms and the #1 factor explaining the differences in performance across stocks is the amount of debt they hold.
SGY increased debt massively early in 2014 (acquisition of Longview). The assets are great but the leverage came in at the wrong time for them. When you compare two firms, you need to check their enterprise value (Equity + Net debt), not just equity. On that measure, SGY is still a much bigger firm...and their production is double that of Spartan. Both firms are fine operators but SGY got clobbered for their debt. Why on earth they did not cut the dividend more is beyond me. If debt is the problem, redirect all resources to get reduce it as much as possible. So easy, yet so hard to do for Calgary-based executives!
SGY is a steal at these prices. Of course, if oil prices remain low, the stock will remain low but for someone with a three year horizon, I believe the current price will turn out to be quite the opportunity. GLTA!