PNE Q1 FinancialsGreat report with material (significant) increase in cash flow (40%) and reduction in debt (16%).
Is the Sky Still Falling Chicken Little (Mr T)? Dead Money?... Really? Stick to scratching out your living on the ground.
The Party is just getting started... Looking forward to Sept 2021!!!
Excerpt from Phil Hodges Presidents Message - May 5/21. The natural gas market is now focused on how Canada, the United States and Europe are going to refill natural gas storage in 2021 as all three of these markets currently have storage levels below their five year average. The usual stimulus to encourage storage refill is higher natural gas prices which encourages both drilling to increase supply and switching to other
energy sources such as coal to lower demand. The recent higher natural gas prices has resulted in more coal use but drilling has not recovered to historical levels in North America. This delayed drilling response is partially due to the lack of capital available to the energy sector where investors are encouraging producer discipline to live within funds flow and pay down
debt.
An acceleration in LNG exports from the United States has increased the tension on these supply/demand dynamics. Pine Cliff’s operations team and field staff is performing well and we are proud of the work we are undertaking to abandon inactive wells. This activity not only lowers future environmental liabilities, but also reduces our future municipal tax and
surface rental costs. Lowering costs has the same impact as rising commodity prices, in that our operating margins are increased. When both these forces are at work, we see the kind of funds flow that we have reported for the past two quarters. We are optimistic that this improved financial performance will continue for the rest of 2021. You may have noted that we
reported a cash position of over $15.5 million as of March 31. Our management team is focused on the various capital allocation options to optimize that cash, which could include debt repayment, drilling or asset acquisitions.