TSX:HSE.PR.B - Post by User
Comment by
oilandgasmickon Mar 01, 2020 10:44pm
175 Views
Post# 30754285
RE:RE:RE:RE:RE:RE:results are not that bad, management is though
RE:RE:RE:RE:RE:RE:results are not that bad, management is thoughNo matter who wins in November, the major news story in late 2020 (IMHO) will be the unravelling of Americcan fracking production due to the continued pressure of activist shareholders and much tighter equity and debt issues. Shareholders and bankers are finally on the same page when they ask "where are the profits and why has 80% of the capital been destroyed?" The Big Short in the American industry has to take place--it's just a question of when-- but I am told that the BOD's in the fracking industry are as entrenched as you can get. Old habits die hard with these guys.
Chesapeake (natural gas,not oil mind you), Range Resources, Matador Resources, South Western Resources, Callon etc. are the leading edge of the wedge. XOP and OIH ETFs under big pressure as well. It's not just Canadian oil and gas equities that have been hammered.
Having said that, if will still take a while for U.S. production to deflate but as the trend finally dawns on analysts, the "incremental barrel" priced at 35 bucks for heavy oil production in Canada will start to look good. There are no massive debt/cash flow problems for HSE, SU, CVE and CNQ.