Own a modest position in erf and heard on Fast Money that one panelist (Jon) made PWE his final trade choice, presumably on options activity(18k june 10 calls). I am not an options trader, but am considering selling my erf holdings and buying PWE stock. Any comments on this move? Thanks in advance.
I have looked at ERF close over the past year, but prefer PWE because it has better reserves, I believe more flexibility inits asset base, it has made substantial investments in oil and gas field to determine driling location for the next several years (about 10000), and has put in infrastructure to many of the drtilling location sites. I belive a patient investor will be rewarded in future quarterly income statements because of lower CAPEX expenses per oil developed bbl and higher netbacks. I also believe because of the work it has put in to determine potential drilling sites location makes it an attraxctive takeover candidate at this price because of the large reserve base. .
I'll weigh in on PWE v. ERF
1. Insider ownership of PWE 5%, ERF NA
2. 5% insider stake in PWE by Chinese Oil company
3. PWE higher % dividend
4. PWE committed to present dividend
5. PWE 30 years of drilling sites on millions of acres
6. ERF. x dividend tomorrow
7. PWE paid down 1 billion of debt last year
8. I bought PWE at 11.63 and 11.42 thought it was a good value and added below ten 3 times
Not a very good judge of ERF. The call on CNBC this afternoon is very bullish and the Najarians usually know something. But the only thing certain is death and taxes. But with a 10% yield, deep reserves in nat gas and oil, I like PWE. Auto traffic is heavy and very few alternatives; nat gas consumption is growing. This isn't to say ERF doesn't have merit....just haven't looked at it.
The main reason for switching is that PWE has a higher yield at current prices. Pricewise the stocks track one another fairly well, but PWE is now cheaper vs. prices 2 years ago. The options activity for PWE is very high versus nothing special for erf. something must be causing that option buying.