Veresen Inc. T.VSN.DB.B

RE:Jordon Cove

[Beckysboss]

Sukhi19 wrote: I guess, as usual, initial reaction would be by investors woulld be negative.
CEO should have laid out all the options rather than only saying that they would request for a   Rehearing.
Points to Ponder:-

1. Results were strong without Jordon Cove.
2.TD analysis becomes more relevant.
3. As the dust settles down, company should come out with more options e.g. utilizing the funds for growing their power portfolio.
4. There may be a buying opportunity if there is a sell off. With oil price recovering and seeing the Q4 results,  VSN below $7.75 will be good investment.
5. Investors were almost expecting a rejection of this project. TD prediction is a case in point. Despite predicting a rejection, TD gave a BUY rating.
6. There is an outside chance that market sentiment may be postive.
7. After oil companies resorting to multiple div cuts, income seeking individuals and institutions may find VSN attractive.  Anybody who had 1000 shares of CPG one year ago has his income pared down from $230 PM to $30PM. Same applies to many other companies in that space.
8. I am investing with an adverse case scenario of 50% dividend cut by VSN which is highly unlikely. 

 Good post !   Without offtake agreements the LNG project wasn't going anywhere,  I looked at as a possibility way down the road but really just a discussion point at this time.  Regarding the dividend doesn't hurt to plan for the worse but I doubt it will happen.  The way VSN has built their financing for the Montney gas plants the DRIP program is an integral part of that,  the money they retain.  If they drop the divvy at all it impacts that part of their plan.  At most they want to get to a 80% POR which they feel the midstream Montney plants will get them to,  that is only a couple of years away so why touch it now?   If they did cut I would imagine it just be that 20% that the desired POR reflects. 

 Like anyone I wouldn't bet the farm on VSN but in the $7's where I bought I would be ok if all I got on the year was that dividend. If my whole porfolio gave me 13% annually I would be a happy camper.  I think the divvy will attract buyers,  it isn't going away  VSN is a much stronger company ,  more diversified today than it was in 2009 and they held it all thru the financial crisis when debt was a huge worry to investors.  Pipeline companies always carry a lot of debt.  I remember it well because I bought IPL in the $6's,  wasn't easy to hold anything thru that but eventually I made a lot of money while I collected the divvy for years.