Over done!Good morning all and Merry Christmas, just 10 more days!
Just a couple comments and then a quick calculation to show what SGY is currently getting per barrel of oil.
Canadian oils is completely oversold at this point and that is just exaggerated by the recent tax loss selling. SGY is being priced like there is a dividend cut coming and we are getting $20/barrel.
First I see no dividend cut coming if prices even stay where they are currently, and I actually believe that prices will be up over the short (3 months) and long term (12 months). SGY is currently getting $51.41/ barrel in Canadian dollars, this is more then the company needs to continue to pay their dividend. This was caldulated using WTI minus discounts for WCS (45% of SGY production) and Canadian Light (55% of SGY production) and 1.335 for exchange rate.
The production cuta will effect SGY in a positive manner. Cuts are only come into effect after the first 10,000 barrels and keep in mind some of SGY production comes from SASK which has not implemented cuts. SGY Capex will also have to be cut for 2019 as there is no point drilling if you are not allowed to produce more oil, some drilling will be needed to maintain, but no need for growth in the next 6-12 months. This should allow SGY the ability to pay down some debt especially if oil price increases.
Anyway just my thoughts on an early Saturday morning! My nest egg has taken a big hit lately, however every chance I get to add a $$ to the market it goes to SGY.
Have a a great day!
Kid