Paramount Resources Ltd T.POU

Underlying Assets need a Performance Strategy

[MyHoneyPot]

Paramount needs to set itself in a Class of its Own.

A problem for Paramount is how do the assets on the balance sheet contribute to the success of the company today. (Do Analysts even consider the value of underlying Assets?)

It seems to me we have dead money in assets with high evaluations, and the analysts hardly take those assets into consideration. Other companies like Tourmaline have taken assets like these and spun them into other companies so that get fairly valued.(Topaz)

Arguement is the Asset on POU Balance sheet are not fully exploited or fully valued.

There needs to be a focused effort to extract full value from those assets, and evaluate how to monetize the assets and insure they are adding value to Paramount as a company.

FOX Drilling - This is a 175 million dollars asset, a 175 million dollars at 7% interest is about 12 million dollars a year or roughly (2 more wells that could be drilled) The other kicker is that 175 million more on the balance sheet will rerate the value of the company. 

Cavalier Lands - 2 million acres of the best oil sands leases, need a lot of full time effort to extract value out of them, Maybe they should be in a separate company from Paramount who is working 100% of the time and their existance is soley based on monetizing those assets. 

Waterous Fund - Waterous will pay back but having tied up that amount of capital in a fund like Waterous when you are capital constrained yourself, we need to get out of that deal and we need the cash. Wapiti is waiting for capital deployment. 

Nuvists Shares -  Nuvista share there is 100 million dollars, i think that POU needs to get out of that stuff just a distraction and reduce the debt and get the company paying a divided. 

Trilogy - I think Trilogy has been a bad investment for POU and should never of happened, we could of picked up Trilogy for pennies on the dollars, and now we have the best assets in the Kaybob are and are deploying ZERO capital. Its a waste of money and a waste of capital.

I think POU has way to many irons in the fire and is needs to improve extracting value, or it is simply becoming a value trap. JR needs to figure out ways that all their pieces are fully valued, rather then simply having investors like us looking at it that can don nothing.

There are 100's of millions on this balance sheet and we are neither investment grade or paying a divided.

IMHO

[not4anymore]

BHP, a lot of that stuff is not worth that much. JR should do a significant joint venture deal on Karr and Wapiti; bring in 3rd party money for drilling and completion with all cash flow going to service debt. May 5th BMO should be an interesting morning!

[PabloLafortune]

Sell NVA and buy PD.

[Robertboblaw]

I disagree, Personally, I think pou is fine just the way it is. Leave the investments as is, do NOT sell them (including Waterous). Nuvista could be worth $8/ per in 2 years. Pous investments alone could be worth $700 to $800 million in 2 years. If we can find a way to reduce net debt to ~$600mm in a couple years, along with 20 or 30% higher oil prices, i believe we will be seriously rolling.

[Raymondjames]

Robert- I think we are going to get to your net debt number sooner than you think. I also agree with you that I like where we are right now. I have a vested interest in having the share price rocket tomorrow but I am also good with $20-30 in a 2 years as long as we don't get to $6 again. Don't see that happening but who knows.  The biggest concern I have is stranded assets. We have

[Robertboblaw]

Barring a catastrophic collapse in oil prices like 2020 ( but like you said Raymond - who knows - could happen) i also really don't see $6 happening again anytime soon. Also to jump on HPs point about the oilsands assets, i highly doubt they have much value tbf. They've had those leases forever and I think they tried to find an international buyer for them years ago before the 2015 oil

[MyHoneyPot]

KOCH - The oil sand assets had a large addition Aug 2019 when the Koch brothers disposed of them to Paramount, so i think there is value there as well.  I fell POU has a ton of assets, more assets than capital. The best thing that has happened in the last 10 years is CPG buying shell out of Kaybob. Now the well costs are down, CPG is going to drill longer wells and Pad drilling and will

[Raymondjames]

We are going to be getting a divvy sooner than most believe. Yes reduce debt and divvy. Both. This stock is soooo cheap here. 

[RookieReturns]

My question for you HP is when has POU paid dividends in the past? Forgive my ignorance, I haven't been able to find any data on this. I also hear a lot about the management team, what is so special about this team vs. any other producer?

[MyHoneyPot]

In January 2017 POU distributed a dividend of VII generations shares to its shareholders, it was pretty good at the time, can't remember exactly what it was. I do believe that POU has spun off several companies over the years, but recently not so much as the oil and gas industry has been in the down. However they did sell a valahalla play, they did a 340 million sale to waterous, Pipe has

[RookieReturns]

They distributed VII Gen shares? How did that work? 

[Robertboblaw]

You were dividend out VII shares as the dividend. Based on how many pou shares you had.

[Raymondjames]

Rookie - I defer to Honeypot's fundamental analysis of oil and gas companies.  But when I talk about dividends, I'm speaking of special dividends like the Vii dividend back in 2016.  We have nva on the balance sheet and other assets. In 2022 we wil be atm machine. JR can declare a $1-$5 dividend on a special basis. Returning capital to shareholders is top of mind.  in