Weekend thoughtsGood morning all,
It has been interesting to watch SGY over the last couple of months. We have seen a nice move up on volume, then some volatility and consolidation at our current levels. I think this is healthy and we will most likely move sideways for a while unless we see significant move in Oil Price, at which time we will move with oil. Some of my thoughts:
One, nice to see the closing of the sale with TVE. Great to have a large portion of debt paid off, also I see some opportunities to potentially partner with TVE in the Sparky play. TVE has more cash at their disposal right now and may be able to expedite the growth and reputation of the Sparky play.
Two, the only real hedge fund in Canada that is exclusively in Oil and Gas right now is Eric Nuttall’s 9 Point Energy Fund. Nuttall is very vocal on what he buys and is pushing it in the Canadian market. Unfortunately for some unknown reason Nuttall doesn’t like SGY. I actually think it is priceless that he went on BNN yesterday and spoke about TVE’s acquisition of a Clearwater play (roughly $30 Million) yet did not discuss their acquisition of the Sparky play ($106 Million) from SGY. No sour grapes from me though, that is how the market works, we all have our favourite companies. SGY didn’t move with oil on Friday as Nuttall was on BNN and pumped his favorite stocks, causing all the retail money to be put in to other companies, like TVE up 11%.
Three, I find it odd that SGY was going to released their 2021/22 outlook on March 25, and at the last minute just updated their presentation and stated they will update their outlook on or
before April 29th. Not really sure why they would do this. Possibilities – Results have been better or worse then expected early on and they want to wait till 32 wells are complete to give an accurate update? Waiting for the Valhalla well to be completed and get some early results, as this is a high producing well? Maybe there is another sale of a piece of land coming and they want to wait for that news to come in prior to announcing an accurate outlook? Who knows the reason at this point, but I expect the reasoning is sound.
Four, SGY is extremely undervalued at this point, I don’t believe Paul is looking to have SGY taken over, however I do believe there is a chance that an offer comes in. At current oil prices, free cash flow is mounting at many Canadian Oil companies and they are going to be looking for ways to spend it. SGY may end up in someone’s sights.
Always enjoy speculating on the future of SGY, know that it all is just speculating and trying to tie the pieces of information I do have together. I have no inside scoop, just enjoying the process.
No matter what the outcome, I believe the future is bright for SGY share holders, and that is way I have long!
Good luck to all the other longs!
Have a great day!
Kid