Cequence Energy Ltd Common CEQXF

RE: Tinkering in cap structure

[EstevanOutsider]

We are in a period of no growth for the industry, even in the U.S. "growth" has become a negative factor as shale pillages the market which is resulting in poor gasoline cracks and stockpiling in PADD 3.  In Canada, my opinion is that no growth for natural gas represents the current winner - any immediate or short term growth will become negative financially as AECO is not expected to outperform for at least another year.

As for Cequence light oil, we still need differentials to improve and WTI to increase.  In my opinion, give this time too as U.S. shale begins to pullback and U.S. growth predictions are on pace to disappoint, with the worst yet to come.

If we can get to the period where we have another LNG project like Woodfibre in our view, plus say Goldboro LNG, plus Line 3 and TransMountain, the valuations of Canadian energy are going to be re-written, this could be much nearer then most people think.

Canadian energy is trading for death.  Natural gas is a growing industry despite of a recession or not, demand is growing y-o-y.  

Once we have a more clear outlook on egress options and more favourable government policy (even the loony Liz May is now backing Canadian energy dominance), probably all energy names in Canada are going to skyrocket from current valuations.

I prefer Cequence hold off on mergers or growth until the situation becomes more favourable, which is very likely within the next year.