Bonterra Energy Corp T.BNE

Picked up oil stocks today - includes BNE

[snowshoedb]

I couldn't resist buying more oily oil stocks today. The stocks are trading at rediculously low multiples of the cash being generated and many of the companies have a solid hedge book to mitgate the risk of lower prices into 2023. 

Barring a meltdown of either of the largest economies (China & US) we should see a major turnarround in Oil prices in the new year. If I'm wrong with my current investment overweighting... it will hurt.

If my belief that we are structuraly short oil because of lack of investment and a recovery of China (after the next coming 2 waves of Covid... then i look forward to both the dividend income and capital gains.

[snowshoedb]

I calculated a couple of ratios for BNE yesterday: SP was trading at 1.13 times operating cash flow yesterday SP was trading at 1.99 times free cash flow yesterday ~ Would you buy a business that pays out 50% of the acquisition cost in cash in 1 year. Assuming oil prices don't melt down... the only threat is china or US economies having a melt down. All othe fundementals of the physical oil

[sclarda]

BNEs budget for next year used oil at aprox. $75 and stated that after the increased capex they would have aprox. $45 to $50 million left over in Free Cashflow. At the current market cap. of aprox.  $220 million that equals aprox.  20% to 22% Free Cashflow to market cap. That is a good rate the problem is that BNE still has aprox. $160 million in debt and that money will go to pay back

[TheRexmember]

Dividends are 6 months away. 

[snowshoedb]

When I did my calculations earlier before their latest CAPEX forecast... I had come to a similar conclusion. can I ask what leads you to believe that they will likely start paying dividends around the beginning of Q3?

[TheRexmember]

Hey Snow. Ithink they will pay starting in 6 months because ( not in order of importance) 1. there are no covenant restrictions they won't be meeting at that time preventing payment.  2. typically the heaviest debt reduction occurs in late Q2. In Q1 they run flat out due to ground conditions and they want everything fracked and tied in prior to break up. Q2 of course has shoulder

[bassgo111]

Updated corporate presentation is out for December 

[churchofnutsacc]

So that is nearly $1 per share in FCF at $70 oil. And $80-$90 is rocket fuel for Bonterra. It's hard to find a small producer with better per share metrics than Bonterra. Of course debt is an issue but even at $70 oil, it is only a metter of time before debt is no longer a issue. They could easily pay 5c per month at $70 oil debt free. Look at those hedges, I want to weep with joy. Bonterra

[TheRexmember]

For Sure. Under promise, over deliver. Even in a choppy price environment I expect close to 100 million in free cash flow in 2023, with just a moderate move in prices.  tax loss selling is mostly over, impressive how shorts took advantage of the weak liquidity heading into year end. Now that selling pressure is over, I expect some covering is also taking place.  January should be