RE:RE:RE:RE:RE:RE:In line with ExpectationsA few quick thoughts that caught my eye, I didn't go into any costs in detail yet:
- Those hedges for 2021 don't look great. 18,100 BBls of oil at ~$46 is looking pretty bad. These must have been entered into months back so nothing to do about it now. 57% of 2021 prod is alot and most of those hedges look to be out of the money as of today so lets hope whatever caused them to panic and hedge for 2021 they close the hedge book entrirely after 2021. This seems like alot of production hedged for JR who (to my knowledge) is a staunch anti hedge guy.
- 2020 free cash flow was roughly negative $70 million. I'll take it as they were able to achieve slighly higher porduction than expected in Q4 so hopefully this means they are on track to hit the 80,000 BOE's in 2021 (which I believe is a necessary step for us to get to $20 SP).
- Free cash flow of $100 million to $160 milllion in 2021 seems high given the singifcant amount of out of the money hedges? Dunno, anybody think these targets are for real given the hedge book etc? I didn't llok at D&C&TI costs but given they were essentially free cash neutral in Q4 this should be positive I would think going forward.
Otherwise, seems like business as usual to my eye. I'm not really going to put too much stock into 2020's results because they likely aren't indicative of 2021 given how solid oil prices have rebound already in 2021. I'm going to be more critical of Q1 and especially Q2's results after drilling season ends for 2021 to see if JR can really pull this off and bring POU back to the glory days. GLTA