RE:Peyto taking a page from Birchcliff...........There are analysts and firms who will disagree with your assessment seeing how many of their price targets are still higher than today's close of $15.67.
Scotia for example has a $20 target price. We'll see.
mrmomo wrote: To sustain their divvy.........But with a different twist! What do i mean by this? They are both borrowing to TRY to keep their divvys intact, BUT Peyto is doing it in a more subtle, discrete & off the radar way compared to Birchcliff. In other words, a smarter, less invasive way which will not alarm investors but imho the resulting effects are identical.
What Peyto has done here, is instead of borrowing directly from their lines of credit like Birch has been doing to serviice their dividend obligations, Peyto acquired Repsol's Canadian operations to increase their revenues. To levels where they CAN sustain their divvy payout.
What do i mean by this for those who STILLhavent caught on? Before the Repsol acquisition, Peyto was producing about 100K boepd. Which with current NG pricing, would have NOT been enough to cover all expenses, capex & their divvy obligations. But with the Repsol addition, and going from 100K to ~130K boepd, they will bring in sufficient revenue to cover all. Basically, they will be bringing in the SAME revneue with 130K they did with 100K. Because of deteriorating Ng prices......
The problem? They doubled their debt load from $750M to $1,5B ........again! So is really different from what Birchliff has been and ultimately getting their stock punished for doing so ? In the end, probably not..........
Now Peyto's stock continues to climb a little higher to over $15? Isthis warranted or justified with current Ng pricing? Absolutely not! And i surmise this is the result of company insiders & investors seeking lucartive passive income pushing the stock up to unsustianble levels. Remember folks, the last time NG priceswere this low, the stock was trading at 1/5th itscurrent price AND they carried the SAME debt load they are carrying now............
Andf or those who think i bashing the stock for no reason, i strongly suggest you look at my previous comments in the past few years. I don't hate Peyto, on the contrary i like the company & mgmt....i just don't like them at current prices with what Ng pricing is at now. And there'sNO reasonable justification WHY they should be trading at these levels.......NONE.
So i strongly suggest people unloafd at these insane levels because the stock isdefinitely overvalued by almost ANY metric you can think of & the future for NG pricing looks bleak & dismal for the next 12months........
My two cents worth for Monday Morning..................
GLTA