Great DayWith WTI trading in the $93 to $94 range, I think it is a great day to officially become part of a heavy oil focused company.
No one has mentioned that when the exchange ratio was decided at the end of May, WTI was trading at only $70. Since then WTI is up almost 35%. That big difference has significantly sweetened the deal. Q3 and Q4 cash flow for Strathcona is going to be way up compared to the Q1 and Q2 numbers that this deal was based on.
Every other similar heavy oil company like ATH, MEG, Cenovus, CNQ is up significantly since then. If Strathcona was trading, it too would have gone up, up, up. Lucky for PIPE shareholders that the exchange ratio was already agreed upon before the price of oil started its bull run.
With AECO natural gas plumbing the depths at $2.19 for October delivery, I think PIPE was lucky to get the deal that they got. Time will tell. Here is hoping that Strathcona begins trading next Monday at $35 or better.