Bonterra Energy Corp T.BNE

Debt level

[Flush11]

Debt has been a problem for 8 years?  Amazing that collectively we forgot a massive production curtailment province wide due to a pipeline shortage, the brutal differentials that followed , the huge drop off in both drliling and prices during the pandemic and then summed up our current share price by "too much debt" . I am not poking at anyone. Its a common comment

and yet this company can cash flow 140 million a year at 70 dollar oil. Free cash flowing 70-90 million.

its far more than just the debt. The sector is just out of favor. There are literally dozens of stupidly good bargains in this space.  although maybe not as cheap as this one.

[sclarda]

Flush11 wrote Debt has been a problem for 8 years?  Amazing that collectively we forgot a massive production curtailment province wide due to a pipeline shortage, the brutal differentials that followed , the huge drop off in both drliling and prices during the pandemic and then summed up our current share price by "too much debt" . I am not poking at anyone. Its a common comment

[churchofnutsacc]

Yes, debt was a problem over the past decade. Bonterra, like a lot of other E&Ps, were financing unsustainable dividend programs via debt while waiting for a recovery in oil prices that never materialized. A lot of that debt is only being paid back now. Welcome to the brave new world. Investors want these companies to clean up their balance sheets first and foremost.

[bandit69]

Yes! you are 100% exactly right regardless of what's said here to the contrary.  I've followed the financials of many of the mid small caps for years and wrote about this very topic many times over the years including on BNE.  You're bang on with your analysis.

[sclarda]

churchofnutsacc wrote Yes, debt was a problem over the past decade. Bonterra, like a lot of other E&Ps, were financing unsustainable dividend programs via debt while waiting for a recovery in oil prices that never materialized. A lot of that debt is only being paid back now. Welcome to the brave new world. Investors want these companies to clean up their balance sheets first and foremost.

[Flush11]

piles of cash and no debt is just brutally bad business. What are you looking for - a bond return? We need a reasonable amount of debt so when we earn a massive return on drilling we don't dilute the cr@p out of the earnings by having too many shares outstanding. This company SHOULD be run with about 150 to 200 million in debt depending on the covenants required. Dropping to zero is idiotic.

[sclarda]

Flush11 wrote piles of cash and no debt is just brutally bad business. What are you looking for - a bond return? We need a reasonable amount of debt so when we earn a massive return on drilling we don't dilute the cr@p out of the earnings by having too many shares outstanding. This company SHOULD be run with about 150 to 200 million in debt depending on the covenants required. Dropping to

[churchofnutsacc]

Tourmaline is carrying about $300million in net debt right now on over 500,000 boe/d, and you want Bonterra to carry $200 million on 14000 boe/d? What does Tourmaline do with its excess cash? What do you think Bonterra will do with its excess cash?

[bandit69]

There are some valid points from all comments except sclarda who is not only a keyboard kowboy but also clearly deficient in business sense.  From a business perspective, if a company can earn a higher return from it's capital vs the cost of servicing debt and after taking inflation and after tax dollars in to account then it makes sense.  I've done this myself personally and

[Flush11]

how do you think they got that big? Magic?

[sclarda]

churchofnutsacc wrote Tourmaline is carrying about $300million in net debt right now on over 500,000 boe/d, and you want Bonterra to carry $200 million on 14000 boe/d? What does Tourmaline do with its excess cash? What do you think Bonterra will do with its excess cash? --------------------------------------------------------------------- Yes lets keep BNE loaded up with debt and hand out

[Hendrick3]

Thankfully Bonterra has some bright people running it and they will decide what level of debt is acceptable. I would be very surprised if the answer was zero debt and if it was I would sell my holdings because leverage is an important factor in increasing shareholder returns. As a shareholder, optimizing my returns is what matters. It's just good business. 

[bandit69]

Really? did the high debt levels magically appear on the balance sheet out of nowhere?   Sometimes I can't believe how deficient people are in their thinking. regardless, looks like more of the same.  I don't see anyone anywhere with Bonterra on their charts of companies with high cashflow, dividends, buybacks, or excitement charts, whatever those are.  At very least

[sclarda]

Hendrick3 wrote Thankfully Bonterra has some bright people running it and they will decide what level of debt is acceptable. I would be very surprised if the answer was zero debt and if it was I would sell my holdings because leverage is an important factor in increasing shareholder returns. As a shareholder, optimizing my returns is what matters. It's just good business.  -------------

[Hendrick3]

I don't think anyone predicted negative oil prices in 2020 so BNE would be as bright as any of them. Obviously brighter than Pengrowth, Bonavista Lightstream etc. 

[bandit69]

It has nothing to do with 2020.  That was the straw....camel's back, you know the saying.  All of the names you mentioned above were poorly managed.   Lightstream recapitalized countless times but kept the same management under each iteration because they "knew" the assets best.  And you, in typical Canadian fashion say, "thank you for the shareholder