RE:RE:RE:RE:RE:ok qAgreed. I like almost everything I see in the report. Reduced operating costs, great netbacks based on the low oil and gas prices in the first quarter, very smart move to cash in the hedge and pocket the $6 million.
Improved recovery techniques that make Waskahigan and Grizzly very economical when the market essentially is saying it's worthless. Further drilling to delineate the field at both Waskahigan and Ante Creek. Here's what I really like: looking at improved recovery techniques at Ante Creek and probably implementing them in Q1 2016. Those are IMO almost sure to succeed and what do you think the stock price will do when when the market/company is assigning 8% to that field and that number goes to 20-30% or maybe higher? New land acquisition, new drilling. April production 3,000 BOE a day higher with Kaybob choked off for another 1,500 (only part of which has been brought back onstream due to low prices).
All this with the best balance sheet out there, virtually no debt and it's being done with existing cash flow. This management team is one of the best out there.
What I don't like about the report.
The company is getting gassier. Actually I could care less about that if they are making money, which they clearly are. But I think the market has a warped misconception about the gassiness (which for all intents and purposes is normal and RMP has guided on) being problematic and that concerns me in the short term. So my dislike is more about how I perceive the market may react to that in the next 3-6 months. But I am not a trader. In the long term I'm quite happy to hold and sell when management does.
Also what I don't like: no mention of current production. Wouldn't surprise me if management is choking off Ante Creek (that's been alluded to in certain analyst reports-some analysts are clearly closer to management than others) now that they know they can operate full bore there and waiting until prices recover further before they open the taps. They admitted in the report they're doing the same thing at Kaybob. They're not going to give away their product.
Keeping the balance sheet clean. Waiting for the recovery in prices, which is already under way. Good cash flow even at ridiculously low prices which are now substantially higher. What's not to like? In the next couple of years this company is going to fully turn the taps on, radically increase reserves through further drilling and enhanced recovery and then sell. As long as the oil price cooperates and moves into the $75-$85 US WTI range in the same time period I would expect it to be sold at least in double digits.
The only real worry I have is a hostile takeover before that at a lower price but hostile takeovers are rare in the Canadian oil patch so I'll take my chances.
I can be patient and wait.