Obsidian Energy Ltd T.OBE

Kavern 23

[pennydredful]

very   astute   move   to  get   out  before  this mini(I hope) crash  we are  seeing  today.

[kavern23]

Hard to say what this week will bring....china covid news is definitey driving things today. Tomorrow is going to be so key for oil prices....if oil closes below 100 tomorrow likely a further leg down. Hold 100 tomorrow...likely 100-115 for this whole week. Alot of speculators in WTI still...and it makes for violent trading moves. tomorrow will tell how strong the speculators are behind this

[kavern23]

Penny At what price are you buying OBE??

[pennydredful]

I  currently have none. I actually sold too soon but still had a 100k+ profit. Lately I  bot YGR  and bot the back end of the JOY deal  at 3.45 that settles this Friday. I acquired more Surge lately. Still holding IPO . YGR  is likely the best bet now however they  lack marketing  IMO  compared to  P.C.at  Surge and  Josh  Young for 

[pennydredful]

I guess you  are asking  at  what  price would I buy it. Right  now I can't be that  aggrresive  as  a  margin player  and  will  wait  and  see  how  things  play out  but  it  will be  tempting  in the low sixes  . Usually  I  spead  buying  over  a 

[kavern23]

The market is wierd right now....unfort I think OBE will drop to 7 - 7.40 if oil sinks too 90 bucks....with a chance too be in 6's briefly. A press release on the debt financing is prob only way for OBE to have a chance to hold higher if oil was too sink to 90. It is what it is...but retail buying is still very cautious.  Stocks are not holding their gains on dip days. Have no clue with

[Mickey2]

what's your entry back in OBE Kavern? it appears oil is going to drop near $90 TODAY...we just touched 93.56

[JohnJBond]

Now is your chance Sunshine!

[JohnJBond]

OBE is looking at Q1/22 funds flow around $1.5/share Annualize that and its $6/share. $9 is 1.5X funds flow.    You are not going to see that very often.    When you do, if you sit back thinking it might go to 1x funds flow, you will watch opportunites come and go, while you sit and do nothing. The above numbers are where we are right now - today. After Q1 comes

[Mickey2]

is $1.5 ff a number issued by OBE or this is from your own calculations. is ff same as cashflow? Thanks Johnbond.

[JohnJBond]

My numbers obviously - OBE won't give their Q1/22 until early May. Their last published funds flow was Q4/22 at around $1/share (when production was about 13% lower, and when oil prices averaged about $77) While a cash flow statement is concerned with the flow of actual or notional cash, a fund flow statement deals with cash as well as all the other items that constitute working capital

[TheRexmember]

John do you bother throwing in some adjustments for net debt improvement or just use a cash flow target? The free cash flow for 2022 has to be worth at least 2-3 bucks a share. 

[JohnJBond]

No, at this time I'm just focusing on what Q1/22 may be like. I have my estimates for Q2-Q4 but they are just point estimates at this time with very wide variances.   Those estimates will tighten as they approach. Right now we are 2 weeks away from the end of Q1 so getting pretty close to having solid numbers.   ie 11 out of 13 weeks are in the bag. The first half of March

[kavern23]

The market is pricing OBE like it will CF $4/share for annual funds flow... I havent modeled funds flow but if I did model OBE....I would use commodity prices similar to Q4 of 2021 or even lower for Q3 and Q4 of 2022. Caution is good right now with the state of world economies. I wish OBE had more NG hedged for the summer. I am 90% sure Q1 of 2022 will be the highest NG is all year. I think

[Tim14235]

I see around 3.5x FFO @ 80 WTI thanks

[JohnJBond]

On Feb 24, 2022 OBE provided its FFO forecast at $80 WTI using the mid point of their then production guidance (29,600 BOE). That guidance is FFO of $345 million Thats $4.26 per share When the share price is C$9 that is a 2.11x FFO @ 80 WTI 3.5X FFO @ $80 WTI would be C$14.91 Personally, I expect their 2022 production to exceed 29,600 (I think its higher than that right now). I also expect

[TheRexmember]

I would like to see them move to closer to production maintenance spending in the cardium. Maybe fill a few under utilized plants but nothing too aggressive. Would rather see growth capital being spent to fill their PROP facilities. I read somewhere that they could boost production at least 5000 boe's without any facility spend.  really looking forward to the clearwater drilling

[JohnJBond]

I think you'll find everything is for sale if the price is right. At this time its unlikely the price is right. Things need to stabilize before buyers and sellers can be expected to have equal views of the future. Presently the price of oil has increased above the cost of production for most projects.    In the past that resulted in increased production that started to come

[Hendrick3]

Very well said JB. Your analysis explains why so many companies are trading at 2-3 times FFO and why debt levels are deemed excessive if over 1x FFO. If you believe oil has a future beyond 5 years you should be jumping in with both feet but many investors are convinced that oil is dead. I too believe that is changing with big investors coming back to oil like Buffet and Cooperman. The stigma of

[JohnJBond]

Agreed Hendrick, or is it Mark? Investing decisions in the oil and gas sector should be made on the probability of a dividend being paid, and the size of that dividend. There are three elements I give the most weight. 1.  The actual free cash flow per share (ie how much is available to be paid and when.) 2.  How soon debt will be paid down to a "safe" level, such that extra

[Hendrick3]

Interesting comment on the acquisitions. I agree with you. I am Hendrick and I live in Alberta. I believe Mark lives in Florida. I enjoyyour analysis JB. Keep those insights coming.   

[churchofnutsacc]

Why would Bonterra engage in buybacks? It already has the tightest float in the patch. Where most O&G companies were blowing their brains out on dillution (and debt), Bonterra opted instead for just debt. Bonterra has historical monthly yields that range from 3-8% dating back to the 90s. Bonterra was expressly known as a dividend stock for years and the yields will come back once debt is

[JohnJBond]

The reason is because of who makes the decision. BNE is controlled by one person.    That person may not want dividends - because he will get taxed on them.     If he doesn't need the cash, then he may not want to pay the tax. If that dividend money went to share buy backs, he doesn't pay tax (unless he sells - if he is not planing on selling, that won&

[pennydredful]

Everyone  will  get  taxed  on  them unless  in  a  registerd  account or   held  by a Pension Fund  , that  is why   it  is  better   not  to  pay them  especially   when  prices  are  sky high  for the  underlying commodities  so   better

[pennydredful]

Back  in the  day  Obsidian   was   Pennwest  which peaked  out  about   29.75  .   After  the   1  for  7  reverse   split    ,  The   equivalent   price   for   a  Pennwest   share   is  &

[JohnJBond]

FYI Pennwest topped out at the equivalent of about c$322.70 on or about Aug 4 2006 Those who can't do a 7:1 reverse share split the right way around should be cautious about their use of the world stupid 

[pennydredful]

Agreeded .  The   decline  was  much  greater  as  you have  pointed  out   . BTW   you have  a  typo here ,   world  should  be  word.  I  agree   with  the  BNE   gentlemen  that  it  is best  to  keep  dividends  modest

[Kramerkarma]

I've done the math on the shares/barrels per oil ... there's like 10 posts on my Twitter in reply to questions. So I've got it from every angle. With today's debt boe and shares (and getting more per boe not included) they'd be $31 today for the same value. Put another way every share was worth 7.6% of 1 BOE vs today worth 13.5% of one BOE. The comparison is vs 2014 year

[masfortuna]

Hey Kramer. Thx for the numbers.  My only comment would be to run the same numbers with the median price of the boe over this period 2008-2016. In 2014, we crested the high and started to decline.  Using just 2014 only gives you a comparison of when oil peaked.  We haven't peaked yet... Mas