Bank of Canadaraised interest rates to 3.25%. Fec and oyl sp dropping. Is there a correlation there? Waiting to hear from financial gurus.
Yeah, the technical parts of the operations involved in drilling a well is something that is mostly second nature to me. Geologically, I know nothing but it seems that Kawa was a solid enough result to justify drilling Wei on technical merits.
Financially I know even less. Is fec's financial health being adversely affected by rising Bank of Canada rates? Yes or no. And why? Justify your argument with facts that a competent oil & gas accountant could vet and agee with. Note that oil and gas accounting is much different than GAAP accounting. For example, free cash flow, cash flow yield etc are defined differently. I found that out when BTE was bragging out an over 20% cash flow yield. Usually cash flow yield is in the 100s of percent. But oil&gas accounting is different. The message that we got back from IR was to forget about GAAP definitions when it cones to resource accounting in general because a lot of stuff in the ground that hasn't been produced yet has already attained a value in the futures market ie. it has already been sold. So I need competent oil&gas accounting experts to tell me how healthy fec is in an economic refetence frame or environment, if you will, of rising interest rates.