$450,000,000Even with the current cowardly hedges in place, CPG will have excess cashflow of $450 million by next spring if oil prices remain where they are.
This is after paying the dividend and all the capex required to hit 190k bpd of exit production.
At these levels, CPG is a cashflow machine, which begs the question: why is the market still bidding the stock down?
Could it be because the market doesn’t believe oil prices will stay at these levels? No, I don’t believe so. US oil stocks and some Canadian majors are trading near record highs, thus the market believes the price rally is sustainable in the medium term.
The only response is that the market believes that CPG management will not spend the extra cashflow responsibly.
Bryksa is cut out of the same cloth as Saxberg. Replacing one for the other is meaningless.
We need a CEO like Alex Pourbais, who came in and immediately fired a bunch of people and committed himself to creating shareholder value. Watch how CVE will do once its horrendous hedges roll off.