RE:RE:2023 Reserves Release As per my previous comment the upcoming news might not be good. Just got this from Nugget Capital Partners and their weekly substack
CREW ENERGY (TSX: CR)
While we think Crew Energy is a very good company and the remaining prize for smallcap Canadian M&A targets, we also think the company is in some trouble in the short-term. According to the latest presentation, Crew remains almost entirely unhedged on their natural gas producer in 2024 which is exposed to the brunt of Station 2 and AECO basis, amongst the worst in North America. Luckily for the company, they have been able to target liquids rich production by ‘pivoting’ away from natural gas to more profitable condensate.
It’s not a coincidence in our opinion that although the presentation was updated in January 2024, the net debt levels listed were from September. Unquestionably, the company is quickly building debt to ramp up condensate activity as natural gas prices tanked. The over-emphasis on Crew’s switch to condensate is no laughing matter, they are clearly laying the ground-work for bad news in our view on the natural gas side which is likely to hinder their broader corporate plans to ramp up production and build their long-awaited natural gas plant. With a significant cash flow negative situation and near-term debt build, we think it would be wise for investors to at least wait until Q4 2023 is released to take a position as it is our expectation many are unlikely to like what they see and the risk of a sell-off is relatively high.