RE:RE:RE:$72 + oil and only .85 cents I think you're reading a bit too much into it...most mid-small cap Canadian oil are getting hit pretty hard these last two days, regardless of their debt situation.
That being said, generally speaking, the more leveraged the balance sheet, the higher the beta of the stock (both on the upside and downside)
riski wrote: I think there is more at play here than you realize.
The NVA refinance has to have sent a chill down the spine of all big investors in companies with debt coming due. A refi at a higher rate than the debt it replaces indicates that they had trouble securing the funding. It confirms that capital for the O&G industry is still scarce even at $70+ oil.
The NVA deal should, rightly, raise doubt about ATH financing. At a share price of 0.99, the assumption of a favourable refinance was priced in. Now the market is pricing that out with more risk on the table and even the possibility of not being able to refinance at all, or more likely requiring a merger on unfavourable terms by a shark circling in the water.
The most likely scenerio is that they refinance at some point, but the terms are almost certainly not going to be as good as investors were hoping at share price of $1.00 with the possibility of something much worse.
That debt is due very soon and needs to be replaced. Given the new information, I think this will now drift until they announce a new debt deal.
cahclick wrote:
When ATH reached 60 cents a while back it faultered a few times and fell back to the high forties a time or two before charging on to 80 cents.
If ATH can pay off ALL debt and buy back ALL outstanding shares in 4.2 years at $65 WTI then you should be able to sleep pretty good with oil bouncing around in the $70's.
Is there risk ? Sure, but this is the best risk/reward scenario we've seen for many, many moons in this corner of the market.
For the most part, Funds won't participate very much until there are dividends in the mix. They're coming as long as WTI stays at or above $65.
Pretty much the same story across all oil names. Some big gains coming if oil holds up.
all jmo
glta
MrICE wrote:
Unbelievable that we are selling off this morning with $72 oil.
investors are listening to all the noise and not looking at what is staring them right in the face.