RE:Decently silent hereHere are some positives. AECO natural gas December 2020 was at $2.40 CDN/GJ. Last December AECO was at $4.00 and this December AECO is at $6.50. Everyone seems fixated on WTI. PIPE is mostly a condensate and natural gas company. A 60% increase per year for AECO for two consecutive years is creating a lot of free cash flow.
In Q4 PIPE will pay down debt from $180 million down to $105 million. That big of a drop in debt in one quarter should be celebrated. They plan to reduce debt a little further next year to a very manageable $100 million going forward. They have the cash flow to start a 4% dividend next year which can be fully covered even if WTI drops down to $55. If WTI goes back up, expect that dividend to increase or maybe there will be some special dividends throughout the year like Tourmaline pays out.
Less money going to debt and interest in Q1 means $50 million will go towards a SIB. That share buyback is in addition to their NCIB. With all the cash coming in only being able to buy back 10% of their shares through a NCIB was not enough. They need a SIB to get the good times rolling immediately in Q1 at these depressed share prices. SIB first and more NCIB buybacks will continue throughout next year.
The condensate PIPE produces sells for a premium compared to WTI. Canada is under supplied and will be for at least the next few years. I would rather be investing in a company selling condensate at a premium to WTI compared to a company that has to sell WCS oil at a steep discount to WTI.
With more than 50% of the outstanding shares held by two entities, there is zero chance of this company being bought out at $3 a share. This company will only be sold when they want to sell and that will not happen at these prices.
The November news release that sent this stock tumbling is way over done. They plan to grow production from 32,000 boe/d to 41,000 boe/d over the next two years. What's wrong with that? Absolutely nothing. That amount of growth is less than originally promised but it is still a healthy amount of growth without needing to increase debt to do it. Considering the recent cost inflation of drilling and services, growing at a more modest pace is exactly what they should be doing. The land they have already acquired will support continued future growth.
Steady growth, a great land base and dividends and buy backs are exactly what investors have been asking for. And for delivering that, PIPE's share price has been severely and irrationally punished. I think PIPE at under $3 a share is a fantastic buying opportunity. Start buying shares now before PIPE buys them all. They know how undervalued this company has become.
RuudinFrance wrote: My PIPE 6+ bag has gone to a <3 bag.
Ouch!
I need some support with a solid foundation to keep the faith. Anyone got a positive spin?
Not so long ago, I figured that I'd see a takeover between $4-5, but I'm no longer sure about that.
Pretty happy with a diversed portfolio, even though B/P metals are not doing very well either.
So, keep your spirits up and
have fun.