Move along!.....Nothing to see here!Or is there? Be forewarned, this is a BERY long read & only for folks with common sense & an IQ in excess of 100 are advised to access this information/portal.
If folks are expecting to see some "great" reveal with these Q2 results from ATH, you'll be sorely disappointed. To make things short & simple, after skimming through & digesting the report, the numbers came in as one would expect they would. So WHY do i care? Personally, i don't really. I'm not a shareholder here and don't really care to be one (longer term) in the company either. I continue to believe this is an overbloated, trendy name that should be trading well below its current levels, to around $2.50 whee it would be "fairly" valued. So why is it trading above that value & why do i care if i'm not a holder?
Before i answer those spicy questions, let's just address a few things in the report. Like i've said here, there's really NOTHING special to seem but folks should be aware of a few things. One, revenue is drastically down from a year ago, which is normal as oil prices have come down substanially since then. Should folks who are s/h worry about this? Now? Meaning in the next 6 months.....NO. But come 2024 and when many of those lucrative hedges expire & the Russian/Ukrainian conflict dies down, you should be woorried about valuations. Next issue. The debt.
For a company it's size, ATH doesn't have too much debt and it's at "acceptable" levels. It has slightly increased from a year ago, by about $50M and has remained unchanged since the last quatter. Before folks jump up in protest, not knowing wth they're talking about, please be advised that the only "liabilities" i look at are long/short term debt and Decomm liability. And any other debt that looks out of place such as a HUGE tax defferal, which ATH doesn't seem to have issues with. So at the time of this writting, ATH has about ~$300M n both long & decomm liabilities. Next up......where did all the cash go?
Yeah....this little item, their cash-on-hand, or maybe better put in someone's hands lol, was a real mindbender. There was a huge decrease of about ~$30M, despite the company making about $75M, excluding non cash expenses, for a total discrepancy of about $100M. So where did all that money go? After briefly scanning their financials, i could not find out where it all went and honestly don't care. Like i said, i'm not a s/h so i have NO VESTED interest and doesn't affect me, BUT if you are maybe you should take some time and account for all those greenbacks....or in this case those missing Kanuck loonies.
That's about it for the technical & financials, so take them & what i'm saying for what it's worth. So to answer those q's of why i'm really sticking around this forum/stock & wasting time posting stuff.....well....it's because ATH falls into a specific category when it comes to this lowly sector. A category of great interest to me at this time and probably the only reason i invest in Canadian O&G operators (aside from some enticing value opportunities when they present themselves of course!). And what is that specific reason? Well....it's M&A of course! You see, i see ATH as a potential take out target, even though it's an overpriced & overbloated pig. The question here is would someone go to great lengths to overpay to secure ATH's assets? Maybe....maybe not.
At current prices, ATH's is being valued at just under $2.5B with about 600M o/s. And also trading at REDiculous levels of about $70k per flowing barrel. So would someone, considering these insane values, actually try to acquire Athabasca Salsa sauce? Maybe if they were desperate enough and the syngergies strong enough it could actually become a reality. With one caveat of course. In it's current form, the odds are low it happens. But if it were to split the company in two, divesting either it's Thermal division (oil sands) or its conventional oil.....the odds would greatly increase and i would say it would be a likely outcome. And i could see someone like Meg or some other predator taking a swipe. It may even enitice poor Suncor, in the dismal situation they find themselves to take a look at them.
As it stands now, things are just stagnating both for the company, its holders and especially the stock price. It's been trading mostly in a tight range, in between $2.50-$3.50 for the over year, with no light to go beyond or fall below those levels. The only ones making money here are the short term swing traders making bets & playing around within those parameters. Everyone else, especially for the long term, loyal, dedicated holders are stuck in a rut waiting for oil prices to go higher. Which imho is unlikely unless there's a blackswan event.....again.....and it's just an all around bad narrative to bet on. But if the company were to implement some major transition and divest itself of either the Oil Sands business or the conventional assets.......things could drastically change for the better.
That's about it for now......and will post more "enlightening" stuff that i'm certain will further enrage (by blowing another gasket or two im sure lol) my dedicated fans & detrators on here. So until then TaTa and i will definitely respond to replies if anyone has any....
GLTA