RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:No SupportYou are correct to say that in 2015 to 2019 PNE produced almost no oil or liquids and they strugged whenever AECO prices tanked; even as HH and world prices surged. So they started drillng the Pekisko wells and have ramped oil and liquids up so that in 2023, when we are again suffering low NG prices, liquids are 38% of revenue. The Certus deal will add to this and management says that this is enough to pay for the debt, the (revised) dividend and their minimal capex plan. I see their assumptions as ultra-conservative, and am believe that these will revise upwards as the year progresses. Oil is has been ahead of their planning number going into the third month; and while what NG will end up is debatable; there is an argument for AECO at least to move higher than the current strip. If they end up ahead of their plan on income, they have options to a. advance debt reduction; b. drill to add more oil income; or c. revise the dividend upward.
In the 5 Mar podcast, Mr Hodge addressed a question about shutting in dry gas that is not making money. His answer was that for a host of reasons, both technical and financial, you can't just turn wells off and on like a light switch, and the bottom line break-even was even lower than AECO CA$1.80. They watch this like hawks and he said for PNE the red line was around about AECO CA$1.00. The cash flow from liquids was what gave the company that level of leeway to carry these assets, if times were to get that tough.
At AECO CA$5 we will be making very good money indeed.