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Bullboard - Stock Discussion Forum Bonterra Energy Corp T.BNE

Alternate Symbol(s):  BNEFF

Bonterra Energy Corp. is a Canada-based conventional oil and gas company with operations in Alberta, Saskatchewan, and British Columbia. The Company operates through development and production of oil and natural gas in the Western Canadian Sedimentary Basin segment. Its operating areas include Pembina Cardium and other areas, which include Saskatchewan and Northeast British Columbia. The... see more

TSX:BNE - Post Discussion

Bonterra Energy Corp > Why OBE news is discussed here
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Post by Hendrick3 on Mar 28, 2021 1:43pm

Why OBE news is discussed here

The answer is there is a pending offer so news about the acquirer is absolutely relevant. 

I enjoy the discussions about OBE's apparent financial crisis while in 2020 BNE was scrambling to make less than $30 million in funds flow and increasing their debt. Meanwhile OBE made well over $100 million ( final number next week) and reduced debt.

Yes BNE is recovering and will be more than fine at $60 oil and yet our intrepid BNE analysts seem to miss the point that OBE will be also more than fine. At $60 oil OBE will have over $200 million in funds flow and they can maintain production easily at $60m capex giving them about $2 share of Free cash flow. Very likely the intend to pay down debt with the extra but they do not need to sell an asset or do anything other than count the money. 

As I have stated many times, I do not think OBE benefits from this merger, they are giving their upside to BNE shareholders. I will also point out that BNE has entered into some very  out of the money hedges and OBE's hedging is minuscule so they have all the upside ahead of them. 

They should be going after IPO which will generate $20 million in free cash flow, 5400 BOE per day and would cost them less than a quarter of BNE. 

I look forward to the deal being fully rejected and discontinued after Monday's share count and I will gladly discuss all things Obsidian elsewhere. 

I agree with Blackdog that better edit capabilities are needed on this site.

Comment by blackdog on Mar 28, 2021 3:21pm
Your continuing faith in Obsidian is admirable, but your best guesses are all the data on OBE’s debt levels, capital allocation and real income that we have. I look at the track record; and whatever improvements have or have not been achieved since Mr Loukas came in, don't see where your optimism comes from.  Nor, over the past seven months, have any of the multitude of good questions ...more  
Comment by Hendrick3 on Mar 28, 2021 9:58pm
Patience grasshopper, we will have confirmation of how good OBE's numbers are very soon.
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