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Penn West Petroleum Ltd. Message Board

  • gboyb1boy gboyb1boy Feb 8, 2014 4:23 AM Flag

    Penn West Continues To Execute Against Its Turnaround Plan Feb. 8, 2014 1:57 AM ET

    Interesting article from Michael Blair at Seeking Alpha. A very good read and I can't wait for "Smart like a PWE Investor" to annihilate the article as only a socialist that he is can. Also, saw that PWE was up to $7.90 in after hours trading. Have a great weekend.

    Sentiment: Buy

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    • Do yourself a favor and anything you see Seeking Alpha or Motley Fool don't even click on the article. They are people like you and me stating their opinions. You really can't give these articles any weight.

    • Just my 2 c. He put together a lot of information nicely albeit nothing was new.
      His NG hedged production levels of 140 bcf out of 220 bcf are close to mine estimate posted earlier as two thirds hedged and one third unhedged. But his average price for 2014 at 10-15% higher than planned seems too conservative to me even with 2/3rd hedged.

      His near term debt level of 2.4b looks too optimistic to me. It was taken by simple deduction of combined assed sales from 3.0b level taken from September 30. I’d love them to achieve 2.4 by now, but have some concerns for two reasons:
      -first – after disposition of such large producing assets resulted in substantial production decrease their cash flow should fall temporary in Q1 (valley in curve) as indicated by Roberts 2 times.
      - second – their 2014 capex will start paying off in Q3.

      Taking both reasons into account they may keep a lot of cash as a working capital for flexibility and I’m not sure that cash would be available for debt reduction later. Also If I recall correctly Roberts indicated specific number by Dec 31 during latest presentation (don’t remember in my head), and that number was likely higher than 2.6b after 485mm proceeds.
      If I’m wrong, and they will achieve 2.4b debt level by March 31, I would be pleasantly surprised and very happy.

      I’m not sure his play on USD/CAD direction is a smart play using PWE, even if I agree that CAD should rise slowly near term, but a few direct USD/CAD currency contract s would do same job simpler and with less capital IMHO. But this is his business.

      Regardless I agree Roberts continues execution, commodity market helps a lot, PWE is risky, but with huge reward for patient investors.
      Long PWE. Staying the course

      Sentiment: Strong Buy

    • ador Feb 8, 2014 9:22 AM Flag

      Great analysis.

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