RE:RE:Slowly UP the scale ... I agree. I'm watching the same thing. I don't know which one goes up a higher percentage. Even long-term I don't know who wins.
BNE has a history of paying out over $1 billion of dividends. I'm expecting the dividend to eventually be three dollars per share. Putting the stock back in the $30-$40 range. But today, BNE can't pay dividends due to debt load and bank restrictions. I'm sure the banks will have to light it up on the covenants after Q1. The cash will be too much to ignore and too strong an influencer for the squeamish banks. It does concern me that small oil companies will never get bank financing going forward because of E.S.G. Investors. Good news is that means continued underinvestment in new production.
PNE doesn't appear to have a debt problem anymore. They have so much cash they don't know what to do with it. Question is will natural gas pricing remain strong in the long term. I think the short term is more questionable. In the long term starting in 2025… Canadian gas will be coupled in pricing with LNG. There's a shortage of compression today. Once LNG Canada is up and running. 25% of Canadas gas will head to the west coast and 50% will still be used for oil sands. The structural deficit will exist for a long time as we are no match to the insatiable appetite of Asia for LNG.
In some ways I think a merger between PNE and BNE would make sense. Both have long term drilling potential and slow declines. PNE has the cash which could help unlock value of BNE. The question would be is speeding up the arrival of the reinstatement of the dividend at BNE worth it? With the two companies merging into a larger company would they gain some Institutional investor attention/investment.
i'm sure George Fink is still having fun coming to work every day. But at some point I'm sure he also will retire. The management team at both companies is quite capable to carry on his legacy. It will be interesting to see what happens in the next year with both companies regardless.
PNE is worth double where it is today. BNE is worth 4to 10 times with a $3 dividend. I hope both companies never get back into debt trouble. And I hope and pray and plead with the US independent producer to not lose discipline… And control they are drilling… If that were to happen and expect another 20-30 years of dividends from both companies.