Prairie Provident Resources Inc T.PPR

Price target

[Stage-2]

If oil continues to stabilize/ rise what price or market cap could PPR see over the next year or 2?

[Justhalffull]

The debt of PPR is the big drag on the SP.  They have not had enough cash flow to even pay the interest on this debt, so it keeps growing.  So the lenders have put covenants on the debt that mandates hedging.  50% of their 2nd half production is hedged at just over $60.  So give $2.2 million to drilling, and abt $1 million in interest, you are left with about $1.8 million

[Justhalffull]

Sorry, cant see market cap rising above $30 million, obviously not capex.

[pennydredful]

Their   lenders  sre not   Canadian   Banks  ( relatively lower  cost)  but    high   cost  American  lenders    that keep  them  on  a very  short  leach  .

[Stage-2]

Any dips I’m buying this little klitty litter

[Justhalffull]

Actually the interest rate is not high.  Avg rate for the 3 and 6 month periods ending 6/30/2021 was 5.3% and 5.2%.  Mimi did a good job in renegotiating the debt in conjunction with the share cancellation such that some of the debt had 0 interest rising to 4% by March 2022.  After that though, rates start to rise, so would be great to get a NAFTA award to reduce the outstanding.