RE:RE:RE:Thoughts on Cardium's companies Q3's....Not defending OBE's management team but they have made decisions with long term focus always. OBE has never seemed so close to end of the rope financially compared to BNE. BNE sole focus last few years has been on debt survival while OBE did buy rest of PROP which was a bold risk. It was worth the interst rate.
My guess on OBE's strategy will in 2023 and beyond will be to scale back capital spend at cardium and use the FCF from Cardium to fund PROP development and capital returns/debt payment. WCP does that with cardium, they drill enough to maintain and use extra FCF from cardium towards other assets in portfolio.
BNE prob has options to buy assets eventually. Lots of companies have cardium production that isnt in core of portfolio. Ridgeback assets, I can see Ridgeback selling out of Cardium. TVE, Cenbous,
Salaries and bonuses are a tradeoff...OBE has kept share outstanding down from use of cash manageent payments.
At 90 WTI BNE can grind it out paying down debt but can they at 60-70 WTI bracket.
It's lower pricing environment that would make companies with higher production costs look for economies of scale of a marger.
Interesting as time will tell.
TheRexmember wrote: Hopefully the OBE ship has sailed. Loading up on a sleazy level of salary, bonuses and options, refinancing the debt at 12% just so they could hit exit production numbers and pay the management just turns my stomach. I dont want anything to do with them.
WCP also has a huge presence in the Cardium I would even take their stock, but obe, no thanks. YGR would also be an interesting merger candidate. At least two cheap companies coming together... and it would solve YGR's decline rate issue in one transaction.
The deleveraging has been a boring grind but the balance sheet is now in decent shape at BNE. Going forward they have a lot of options to deploy the cash. 10 million a month in free cash on a 280 million market cap
The refinancing before the end of the month should clarify what and when BNE will do something with the cash flow going forward.