RE:GXE CJ BNE JOY and LTO Any chance your broker could come on here and articulate his supposition? Reading between the lines (which is difficult) I see merit in the deleveraging argument and creating a Newco with a lower cost of capital. Essentially this is the WCP model where Grant Fagerheim bought a combination of low decline mature assets (Weyburn Carbon Capture 2017 off Cenovus) while consolidating top decile Viking & Cardium assets since 2014. The ability to recycle FCF from low decline 2+yr payout(if drilled) assets into less than one year payout (Top decile Cardium & Viking) high growth assets has made WCP a go to must own name.(even at $50 oil)
This model can be replicated with mergers and acquisitions in the Canadian oil patch. Ed over at GXE is highly respected so I can see with him at the helm this could work. I am intrigued at the idea but wonder how difficult it will be to move entrenched management teams.
oilypants wrote:
spoke to broker friend he is OILMAN not accountant told me story about GXE i listen.Eddie Gilmet deleverage company to tell bank stick finger in hole and swivel as he has company back and in control. Eddie big plans erin nuttal accumulating big stock position GXE not down wit oil hug 49-50c 4 weeks chart guy says more accumulation for TOP PICK i say what Eddie plans????broker energy guy NOT ACCOUNTANT says GXE everyone knocking down door for deleveraging vehicle to merge high debt NO DRILL companies.i say give names dont keep me hanging he say CJ NO DRILL merge newco 200million flowing cash 1x debt 3 bagger POP he also say more JOY NO DRIL and he is boss so big problem for some. EDDIE too guy smart ceo but other NO DRIL not so smart guys have corporate entitlement want only to keep job. VP operation drilling pay down debt?wot these guys do no need job sit at home underpants watching tv.NO DRILL no compensation EDDIE take helm but some fight hard for privilege erin nutral bang heads together he buys millions share to make deals tell NO DRILLs to talk. broker friend says after EDDIE top respected guy make GXE into mini WCP buy light oil asset drain flowing cash from newco into bread in butter resource. broker friend such tease i say give up who resource play and tells me CARDIUM big chance BNE Georgie step aside or buy asset merge or find another player. Newco low decline plus light tight oil (LTO)additions huge bagger!!!!!