Pine Cliff Energy Ltd T.PNE

PNE & Natural Gas Fact vs Troll of Fear & Negativity

[snowshoedb]

I have to respond to to the constant negativity and bad mouthing of PNE & its mgmt team. Lets put it to rest and hopefully the T troll will find some other bridge to hide under.

There isnt a single Canadian Nat Gas producer that hasn't suffered the brualtal period from 2014-2020.

If you take away all the noise and focus on the facts as they are which is about:
A) Supply & Demand
B)  GM or Net Backs (Gas Price/mcf - COGS/mcf) x Volume

1) US Dry Gas Supply peaked in Dec 2019 at 97 bcf/d
2) CA Dry Gas Supply peaked in Dec 2018 at 18 bcf/d

3) Drilling dropped off a cliff in 2020. US drilling averaged over 1000 wells/mo in 2019. Dropped to 200 well/mo during Covid Pandemic onset. Feb 2021 Drilling was 380 wells and Feb 2021  Completions were 482 wells.

4) Ducs are dropping but production is dropping faster. Shale Fracked wells deplete over 50% in first year of production. Depleted wells come with baggage of ARO Costs. 

5) US production bottomed in Sep 2020 at 88.9 bcf/d during Q4-20. Production is steady at 90.8 bcf/d. Companies are showing restraint as banks demand their debt repayments and long suffering sharholders demand returns on capital.

6) Canada's US Nat Gas exports are up 20% YoY.

7) US LNG exports are now 15% of production and Mexico pipeline exports are  growing 10% annually and are 6% of production

8) Storage levels are lower in both Canada & US than the prior year and are below the average of the last 5 years.

Now on to Pine Cliff...

1) Pine Cliffs operations are slow decline gas wells. PNE mgmt bought up all the boring gas wells nobody wanted. They see value in long life production (slow depletion rates)

2) They wrote down assets what the price declined as is required in Accounting Cealing tests. That doesn't mean the gas is gone. It just means its uneconomic at prices used in the reserve calculations. Once written down they can't be written back up when prices improve (Conservatism principal)

2) PNE's wells decline at 7%-10%

3) PNE's has pricing flexability as they own some pipelines with crossborder capabilities.

4) PNE's debt is held shareholders and directors (shows commitment) who control 38% of the stock. Shareholder loans to the company should be considered a good thing as they are friendly compared to the bank.

5) PNE is generating cash flow and free cash flow. Free cash flow is after CAPEX costs to maintain production. 

6) Prices are set to improve as production in US & Canada declines and demand continues to grow.

7) PNE will grow its cash flow and will pay off its debts in the next 3 years (1 year before the majority of the debt is due)

Ignore the fear mongerring of Mr T. Ignore the past writeoffs which all companies were legally bound to do.

We are investing for the future not the past. Focus on cash generation... and cash generation multiples. The stock will continue to rise if demand & supply remain tight. Its only a mater of time until the stock rebounds to 75 cents and higher. PNE is not TOU; but both are good companies. TOU is a big speeding locamotive and they are heads and shoulders above their peers. PNE is small but strategic... it will do well. Once the cash frees up thay will be able to spend and grow low risk production or choose to dividend out money to the shareholders. 2021 will be good to PNE.

[MrT2020]

Well thanks for the speech from the promo department at PNE . At the moment spot and strip pricing is below break even for PNE . US production is back Over 100 bcf and storage is filling up again . But you sound like you are on the inflated payroll of PNE so enjoy the gravy train .  As for the future of PNE shareholders you see 75 cents and a dividend ..... that’s where you lose credibility.

[snowshoedb]

EIA reports Dry Production = 90.8 bcf/d Total Supply = 95.4 bcf/d which includes imports from Canada. Perhaps your confused by the term Marketed Production.   It is the end of Withdrawal season so it makes sense that storage will start to fill up.  As for boated salaries... don't think so.They worked hard for their degrees and resultant wages with the responsibilities

[MrT2020]

Yes on the potential value but I’m confused . In their year end statement PNE claims it has 32 million in negative equity . What does that mean ?  I see the investability ... but the share price goes down everyday what’s a good price to buy at ? 

[snowshoedb]

Yes negative equity... they raised capital bought assets at whaty they thought was a good value... market decline... all oil & gas companies did ceiling tests to calculate reserves... GAAP forces a write down of assets. Meaning propertieswith future drilling opportunities are not profitable therefor should be written down at the lower of cost & NNRV (net realizable value).  As the

[Skylar1]

Professor Snowshoedb, you are certainly educating Mr. T , but i have to wonder if it will stick . LOL

[MrT2020]

PNE  will soon be generating  excess Free Cash Flow that will pay term debt off fast , add in a .75 cent share price forecast and dividends . Don’t tell the market but This is a gold mine ! 

[Java7]

Well MT seems like you bought and bought more in a declining market,average down they say, you got burned buddy we all get burned.No one escapes a decline, time to suck it up buddy and quit blaming the markets or owners.  jmvho java7

[MrT2020]

No my average cost is 28 ... I’m ok bought lots at between 7 and 13 so ya I averaged down to where I’m even now and will start buying again soon .   You all take things too serious :)) 

[optex1972]

  only this company isn't run by an oilman but rather a banker who had a dream of being an oil patch guy that failed. BNN is about to run another garbage man of industry real on them real soon

[MrT2020]

no im holding my own with an average price of 28 cents . I bought tonnes at 7 to 14 cents and if someone wants to buy them out  then the share price might go up . Its a 25 to 30 cent equity unless someone wants their assets . Its a takeout play 

[snowshoedb]

Many readers will be surprised that you Mr T (tempest in a teapot) have a PNE position when all you have done is badmouthed the company & management. Im my personal opinion, someone who says one thing to mislead others and try's to take advantage of others is clearly unethical. People work hard for their money and we are all trying improve our lot in life, but it shouldn't be at the

[MrT2020]

Its a free world and a free market . PNE is for sale everyday . I have a huge block for sale now but there are no buyers :))   take care !

[optex1972]

This post has been removed in accordance with Community Policy

[optex1972]

  lol you sure you did not drink too much or smoke too much whacky tabaccky? That was their claim back in 2015! Lol don't tell market but BNN twice told shareholders this was i quote "the garbage man of the gas industry". If anything this company will be bought for mere pennies like Penngrowth was for parking lot storage and bone yards.