RE:likelihood of a takeover of MEGshambano1 wrote: lets put some probability numbers on this event occuring;
PROS
1-good long term assets with approved expandions to over 200,000 bpd
2-low annual capex for next few years to maintain production at 83,000 bpd
3-very low operating costs
4-good management team
5-a little more room to lower costs further in admin and head office
6-selling access pipeline to lower debt
CONS
1-highly leveraged
2-need plus 40 ,wti to break even due to high transporation costs and light oil purchases
3-high interest costs
4-no room to increase produciton as prices rise
5-selling access pipeline to lower debt will increase operating costs
I'm at 50/50 right now, I was higher but I have lowered it since the IMO announcement unless that is a ploy to keep MEG prices lower and the debt service costs would need to be taken over as well and maybe that would hinder buyers????
sure in a 50-60 WTI market the debt looks OK but by them MEG will be trading to 10-12 range and the low ball offers will not work any longer.
GLTA
Are you referring to the oil sands permit Imperial applied for? That wouldn't go in to operating until 2022 (if it goes ahead). Imperial has publicly stated that they are also activly pursuing other oil sands opportunities.