TSX:HSE.PR.B - Post by User
Comment by
oilandgasmickon Oct 05, 2018 2:16pm
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Post# 28753927
RE:Pipeline Bottlenecks
RE:Pipeline BottlenecksAgreed, stick to the script because the bottle neck is not going away anytime soon and neither is 3.3B of debt. I think we could be looking at huge price differentials for a decade and MEG is debt distressed.
If the deal is rejected then the stock could plunge 4 or 5 bucks a share in the space of a few hours. You are right in saying that there is no such thing as fair value in this situation. If I am CNOOC then I want to put the money in my suitcase and get it out of the country ASAP.
HSE has a great balance sheet with very limited exposure to differentials and a diverse portfoilio but it has been a struggle to get to 23 bucks. How then can we look at MEG and say that fair value is 19 bucks? If the market doesn't want to pay up for HSE then why would it jump in and pay that sort of money for a one trick pony that is suffering?
There is really no such things as "fair market value." The price is what the market will pay and right now even the best run energy companies are going for deep discounts-- SU being a noteable exception.