RE:RE:RE:RE:Broader oil stocks trending down againI certainly appreciation everyone's feedback on my post. Given last week's discussion about Frontera, I figured I would look more closely into their current financial situation.
Its very clear Frontera is hurting based on the market's evaluation of their situation. In fact, when Frontera first announced their JV with CGX in Dec 2018, there market cap was close to $1.8 billion. Today there market cap is it near close to same value it paid for CGX shares/land holdings (remarkable turn of events.... lord knows I am sure Frontera would probably love to have that money back, even with the potential of Corentyne seismic in their back pocket). Things have clearly changed for Frontera and by and large CGX as well (given how closely connected Frontera is to the company).
As for waitingstill's assertion that I am being too negative, that's fair. I respect his opinion, as I do many other's on this board. With that, I am stating what I see on the open market right now with other oil A&D deals occuring. Remember, billions of barrels of oil reserves (not just resources, big distinction) located in western Canada, Texas, Gulf of Mexico, etc, are having a very difficult time finding new owners as very few companies are willing to pay any premium.
I have no doubt the new 3D seismic is phenominal and offers a very clear picture into massive drilling targets... this should hopefully give us more leverage in any discussions, but to what end who knows. As outlined above, both Frontera and CGX have precious little financial leverage to use in any discussions and given how 2020 has played out, very few external oil companies have massive money to throw around on wildcat exploration JV deals. Heck look at Total and Apache... a deal was not even made until the well was over half drilled and Total had ample opportunity to asses the situation.
As stated before on this board, I rather make a deal now for a couple hundred million and actually get some holes drilled in Corentyne and Demerra. Lord knows Frontera didn't pay much more than that for everything they got out of CGX and we still haven't drilled a hole. And who knows, if oil low oil prices presist into the fall/early 2021 (very possible, let's not kid ourselves), Frontera might even go lower.
I just hope we see something sonner than later. Again, my thoughts and would love any discussion feedback (good or bad). Cheers.