Athabasca Oil Corp T.ATH

Overvalued, undervalued, just right?

[riski]

At the end of June we were $1.02 and now $0.87.  -15%

At the same time, BTE was $2.40 and is now $3.10.  +29%

The price of oil was about the same.  

That's a 44% delta in performance.  Was ATH overvalued back then, and now corrected?  Or is it undervalued, perhaps limited by the refinance overhang?  Or is it about right?

Or has BTE got away a little bit.  

Macro wise, nothing is really that much different between late June and today.  

I'm curious to hear some opinions.

[Kupotea]

The math is really simple. The company generates an addiitonal $70M a year in free cash flow for every $5 increase in WTI and has a $43 breakeven. Next year without hedges that would be roughly $420M in FCF for a company with a market cap of $467M dollars. The stock is rediculously undervalued under any sort of conseivable metric but why haven't they completed a refinancing yet??? Seriously

[ManitobaCanuck]

I have a qignificant ownership in Baytex as well. Their CEO is very responsive and in the limelight seekign investor attention . They have a new discovery at Clearwater which competes for capital with Eagle Ford ( their best asset) . The payback time for a well drilled in Clearwater is 2 months at current price. Its a good discovery and may add 10,000BPD in output and profits likewise with a low

[Maxmoe]

Easy answer. Own them both, plus a few more names. Diversify. I don't care about a short term (a few months is short term) what is it? Delta? Of 44%. Both stocks are up 8X to 10X.  It's more important you own one of them , than which one so don't fixate on "the one". One of them, actually both of them, has the potential to double again from here. Or just buy one of Eric

[riski]

Oh I own them both and way more BTE than ATH.  But whether to own them both or not wasn't the question which is perhaps why the answer was so "easy". ATH was running counter to and now currently lagging in a very strong trend.  It's curious.  

[masfortuna]

I own both.  Ath got ahead of itself mainly due to the fact the everybody expected the financing to be in place by the summer.  When that didn't materialize, those that had rotated into ATH to benefit from the expected "pop", rotated out causing the sp the drop when others were increasing. That led to more shareholders exiting ath to benefit from other oil plays . 

[Nothingmatters]

That is a plausible answer. Refi hangs like a sword. The question is what is preventing them? Refi rate? Or no lender wants to touch it? I also own both. I was heavy into ath before but now heavy into bte, nuvista and obe. Which has served me well. I have recovered my loses with Ath still being 12% down...quote=masfortuna]I own both.  Ath got ahead of itself mainly due to the fact the

[masfortuna]

My guess is that management CAN refinance at any time but are going to try and accumulate as much cash as they can to limit the amount.  I don't think rates are going to be any different for them in 3 months so if they are paying 6.25% at the moment (if memory serves me correctly) why would they rush to pay 9%?  The sp is irrelevant at the moment to them.

[Nothingmatters]

They are actually 9% percent and i sont think they would get any better deals..given the management's track record.

[Nothingmatters]

And further answer, if you are comparing then SU, OBE other oil companies are also trading below their previous highs. Su reached $31 and now trading at mere $25 still around 20% down.

[mlcb12345678910]

Maybe, more refi risk as we have lost 4months with no news. I am sure some investors are taking advantage of the weak hands who do not have the intestinal fortitude to hold as the refi date approaches. I am holding, actually have bought a couple of times on weakness since June.