RE:RE:The could also sell the rigsI dont think that this company is at risk for the following reasons:
- The Canadian currency is going to 65 cents by end of next year. Therefore, Canadian oil will break down ar 35$.
- POU will still safe as long as Pou make their loan payment, which are at 6$ per Boe.
- Pou has oil hedging for 75$ CAD per barrel, which will ensure that they have enough cash to pay debt.
- Oil wont remain at this price for long. Just a reason that Arab countries can not handle that collapse fo long. 90% of their budgets depend on oil. Also, oil demand is growing.
- Pou has a US loan due on 2023, by that time the Canadian dollar will go up again.
- Pou netback is 15$ per BOE, at low price their netback will be around 8$ which will pay their debt.
- Pou has other investment that can sell to ensure that they have enough cash.
The company that are in trouble are MEG energy which has a huge debt in US dollar. Also, ATH which does not even has a positive cash flow.
So why this stock collapsed from 9$ per share to 6$ per share?
Because, American investor are cashing out before the FED meeting, and now it is the tax season. CAD dollar will collapse to 1.45 the end of the year. At begining of 2016, amercain investor will get into the Canadian market again, and this stock will go back to around 11$ per share which is a fair value.