RE:RE:RE:RE:RE:why is Whitecap c.e.o.?Cardboard1 wrote: There are two technical factors that make WCP a better company than BTE IMO: higher netbacks and much lower decline rate.
Together this means a low cost producer which can survive sustained lower oil prices and more free cash flow due to higher margin per boe and lesser need to invest in capex to maintain production.
Of course, you need a reasonable amount of debt not too fully offset the advantages that I have decribed above and there again they have done a better job than BTE with less debt per boe produced and better coverage ratios.
Regarding price, BTE is cheaper on per flowing, about equal vs 2P NAV and cash flow but, WCP wins by a very large margin on free cash flow.
Finally you have management and there again WCP is among the leanest in Canada with a low $1.10/boe on G&A in Q3. BTE is actually pretty good on that one with $1.34/boe in Q3.
Then how free cash flow is deployed is also telling: they can easily maintain the dividend at current pricing and they have been very active buying back shares during the big drop. The rest will probably go to reduce debt further which is accretive on a per share basis.
Culture can't be too bad either with significant insiders buying during the drop.
I also like YGR, TOG and CJ. I am keeping an eye on CPG with their recent shift but, until I see insiders stepping up to the plate and having more skin in the game, I will wait. Really cheap on cash flow but, when you look at free cash flow, other names with proven management teams working along with shareholders trade at similar price such as WCP.
There are other smaller firms that I like such as IPO, PPR and CQE. Very cheap but, they require more patience and probably a much better energy market for investors to get interested.
CVE is very interesting also. If you back out their refinery interest, this trade at a pretty low per flowing in the $30,000 - $40,000 range. For high quality assets, large cap, very low decline rate this is way too cheap. I also have high regard for Alex Pourbais their new CEO.
Cardboard
thanks for the input - very informative - I went with WCP for some of the reasons that you stated, but without at indepth an understanding - and the other points and the way you view it is appreciated.
now the tougher question is oil going to recover and is oil going to recover in Canada? I've been losing on my oil investments for about 3 or 4 years now and lost a lot, however I did make quite a bit back on MRO when it made a run up as I bought it pretty low - I lost over 250K on LTS - I thought oil would recover sooner than it did - I am sure I lost at least 100K or more on BTE and at least the same on CPG - I did make over $400K on MRO, but overall on oil I have probably lost at least $100 to $300K - I don't know the exact number - I don't have too much whitecap right now - maybe 30K shares or so and I have just over 8K shares of MRO that is down a couple bucks
I still have oil, but just not as much right now and a lot less in Canada right now