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Cardinal Energy Ltd (Alberta) T.CJ

Alternate Symbol(s):  CRLFF

Cardinal Energy Ltd. is a Canadian oil and natural gas company with operations focused on low decline oil in Western Canada. The Company is engaged in the acquisition, development, optimization and production of crude oil and natural gas in the provinces of Alberta, British Columbia and Saskatchewan. Its operating areas include the Midale, South District, Central District, and North District. Its Midale operating area of over 730 million barrels of original oil in place (OOIP) and its low decline in production of 3,200 barrels of oil equivalent per day (boe/d) (net) is supported by both waterflood and CO2 enhanced oil recovery. Its South District operating area is located east of Calgary in southeastern Alberta and produces medium gravity crude, as well as liquids-rich natural gas. Its Central District operation is located in East Central Alberta, which is focused on producing oil from multiple, large OOIP pools. Its North area includes Grande Prairie, Clearwater and other properties.


TSX:CJ - Post by User

Comment by Cardboard1on Mar 04, 2019 10:51am
114 Views
Post# 29438140

RE:Reaction to Line 3 delay

RE:Reaction to Line 3 delay
Unfortunately, I don't share your enthusiasm Joseph. Line 3 is the only pipeline that was supposed to go ahead at a defined timeline with most permits in place. Now it is pushed back by almost a year... Never any good news in Canadian energy it seems.

Alberta now has no choice but, to extend production cuts. Crude by rail ramp-up is unknown since dependent on WCS spreads so can't count on that.

CJ is down 5% so not quite muted reaction and it is visible in most names also. At the same time, it still generates appreciable free cash flow at this production level and oil prices including WCS which has weakened on this news. I think that people were expecting CJ to move back to the 21,000 - 22,000 boe/d level in H2 but, now we are talking possibly a year away. Dividend increase, or certainly size, may also be even more questionable as this puts another wrench into predicting WCS prices. I don't think that they want to raise then cut again on some unforeseen event as they already lost quite a bit of credibility.

However, I agree that there is not much point holding Canadian equities which cannot grow production and/or repay debt in this environment. So free cash flow is key and yes receiving a dividend could be the only return that we will see for a while as revaluation seems quite elusive.
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