RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Odd tradingCashGreenGold, the discrepancy on net debt is easy to reconciliate as I include deferred consideration into net debt. This is a financial obligation of the company whether you agree or not and I do include it into net debt to properly compare with other companies who do not have such.
Finally on that topic, even if you keep your net debt figure at $310 million, you have to admit that there is not a lot of room with capacity at $340 million especially with banks being nervous at the moment. That is something that I am looking over with all my E&P holdings and a fact that we have to deal with.
Regarding discounted vs undiscounted liabilities, you are correct that there is vast discrepancy with all companies involved. However, all of these methods have been audited and signed on by an independent accounting firm. So I have to put some trust into the assumptions as to how these will be discharged over time.
My preference right now are for companies that have a very little amount such as YGR since banks will take these into account more than they use to due to this ruling. Again a fact that we now have to deal with.
On CJ, their bank line limit is $325 million while net debt is $256 million. Moreover, net debt includes $45 million remaining on convertible debenture. So the banks exposure is $211 million including negative WC. So there is some breathing room if the banks were to take down the bank line.
It has been no fun to invest in this sector no matter who you picked. Key concerns remain the oil price and Canadian specific egress issue. They also pretty much all move in tandem so it is hard to had much value by picking specific names other than for the large players.
However, this notion that BNE will somehow skyrocket on a dividend raise is particularly misguided IMO. This is not bashing. It is simply looking at what happened to other names such as WCP, CJ and TOG that have raised their dividends, pay a large yield and still got hammered.
So BNE should keep current plan and take its debt down as it seems to be the only thing being rewarded or see CPG which has held much better to others in this recent selloff.