PWE earning will beat estimates, and have good Q1 guidance. The reasons are
* The management team pre-announced BOE/d number for the last quarter and this year in January.
This basically is to manage wall street expectation, give them information for coming up right estimates.
Of course, usually the pre-announced number is the worst scenario. It is quite common that the
real ERs beat the pre-announced numbers pretty much in all cases( I have never seen the other way).
* The management has been working on reducing the cost. The cost reduction will improve the margin.
* The energy price(oil and NG) has been going up, especially in the last 2-3 months. If may not have big
impact to 2013 Q4 number, but it will have big impact to 2014 Q1 earning.
2nd quarter guidance should be good too with energy prices staying high. I would like to seem them beat their production estimates since the stock price took a big hit for dropping their production guidance a little at the end of last year. I looked at the average price of Edmonton light oil for January, February, and March and it looked to me that it is at least 15% higher than last year. Along with cost control, natural gas prices and exchange rate they should have a good beat?
Sentiment: Strong Buy
More likely NG price will stay around $4.5, and oil price will stay around $100.
Along with some cost cutting effort, PWE should be able to beat the number. I agree that it would nice to see some production.
The good news is that big market is selling off overvalued bubble stocks now. Large part of the money will be moving to value stocks with good dividend(or those value funds). PWE has high quality assets and is traded around 50% of the book value. It will be one of the target for some of the value funds.
I think conference call is the key. I would like to hear them say that they are AHEAD of their goals and if asset sales meet or exceed expectations and energy prices stay firm they will succeed in their restructuring of the company into growing earnings consistently.
Sentiment: Strong Buy
Enerplus and Pengrowth Energy, companies in arguably much better shape than Penn West is currently, BOTH came up short on FFO, and both blamed their shortfalls on factors that will also affect Penn West. I don't think "the Street" will really care what their Q4 2013 results look like, either way. They're going to be more interested in how Penn West's self-proclaimed "transition year" is progressing. Hopefully, they'll have something positive to say; guess we'll all know soon enough......
I agree this should be the typical classic game of setting expection and beating it.
I am not sure how wall streets will react this. They may dump on good news. I have some shares, would like to buy more near low $7 too.