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Penn West Petroleum Ltd. Message Board

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  • circpros circpros Oct 28, 2009 11:34 PM Flag

    this is ridiculous

    There is a point at which owning oil producers is one of the best protections a person can have.... when inflation sets in. We aren't there yet, and it might be a while.

    I'm thinking there'll be an opportunity to buy much lower than we are now.... I got in on a bundle below 10 and sold it all from 14-16+..... and collected the divs in the interim, of course.

    The big question in my mind as it relates to PWE is whether they can weather the next phase of the credit crisis. Debt is more than 6 times free cash flows, and I'm not familiar with the nature of that debt. I won't be putting any money at all to work in canroys until we've taken at least a 40% haircut from current valuations, and then I'll be spreading it around and scaling in slowly. I suspect that some won't survive a protracted credit dislocation, and that is precisely what I'm expecting. I think the end of the trust status is still an unknown as far as future valuation goes, and other than simply playing a bounce if we do another swan dive, I'll probably just avoid them myself.....

    I almost shorted into the big HTE-driven spike last week, but I set my entry target a little too high and missed out....

    But 10 years out, any company that survives the storm ahead that is in the oil business will be a lot higher in at least nominal terms.... the dollar's days are numbered. If I had to buy SOMETHING and hold it for ten years or sit in cash..... it's a no-brainer. But since I can jump in and out, I'm on the short side for now..... but there is a point where I will be willing to hold anything but cash. I suspect that's at least a year out.... If I had to pick a time to see $29 again, I'd target 2013-2014. But I think we see $9 long before that.... FWIW

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