Pine Cliff Energy Ltd T.PNE

Q2 - Cash Position - Q3 & Q4 Decisions to make

[snowshoedb]

I expect PNE to have generated 5 million cash in Q2 leaving them with approx 19-20 million in Cash at the end of Q2.

Management must be mulling over where best to allocate the money they have accumulated YTD.
I would expect a balanced approach where they will choose 2 of the 4 options the mgmt must be considerring:

1) Early pay down all or a portion of the 19 Million due to AIMCO in 2022
2) Drill some Gas Wells - maintain production (Mannville recomplete, Ghost Pine Gas/Oil, Ghost Pine - Sparky) 
3) Drill some Oil Wells - increase production (Pekisko)
4) Acquisitions for high impact gas or consolidation of gas acreage

My guess would be Options 1 & 3. I think the Oil well drilling will occur in Q3 and the Paydown of debt in Q4 if they can't find a small acquisition.

I post a copy of the Note 11 below from the financial statements:
11. TERM DEBT ($000s) As at March 31, 2021 As at March 31, 2020 Term debt – beginning of period 48,747 48,642 Accretion expense 27 26 Term debt - end of period 48,774 48,668 The non-revolving credit facility (“Term debt”) with Alberta Investment Management Corporation (“AIMCO”), acting on behalf of its clients, consists of a first tranche with a principal amount of $30 million that matures on December 31, 2024 (the "2024 Tranche") and a second tranche with a principal amount of $19 million that matures on July 31, 2022 (the "2022 Tranche"). Interest on the 2024 Tranche is payable at a rate of 9.75% per annum until September 30, 2021 and thereafter such interest rate will increase by 1% per annum up to 12.75% and interest is payable on the 2022 Tranche at a rate of 7.05% per annum. All or a portion of the principal amount outstanding can be repaid at any time, but without any penalty or premium after September 30, 2022 with respect to the 2024 Tranche and, July 13, 2021 with respect to the 2022 Tranche. The security for the Term debt consists of floating demand debentures totaling $150.0 million and a general security agreement with first ranking over all current and acquired properties.

[jjgrey]

Shoe I agree on the debt paydown as #1. I believe they will generate closer to $10 mm in cash this quarter with current Aeco prices nicely above 3.00. Strip price look great already for the remainder of CAL21

[Skylar1]

jjgrey says 10 mil , snowshoe says 5 mil , i say 8mil for the second, anyone care to bet a couple bucks on the winner lol.   I vote half on debt and half to increase production oil or gas they both are money makers. I would not be suprised to hear that PNE would buy out some producer i know they are looking . Nice to see that gas price still going up , i wonder how high it could go with hot

[snowshoedb]

In the priority for continued ongoing gas price strength: LNG Exports >10-12 bcf/day all summer Mexico pipeline exports = 6.4-7.2 bcfr/day all summer Summer Heat (hope to avoid California wildfires - I don't want to profit on that)