Headline today so PWE goes from just losing money on its natural gas production...to just losing more money on its natural gas production.
In Shares outstanding(S/O) and executive Pay(ie. total compensation)-includes future projections:
2008 EOY Prod: 184,908 boe/day……S/O…387 mil.
CEO Andrew:...$1.6 mil…..COO…M. Nunns…$2.3 mil.
2009 EOY Prod: 170,164 boe/day……S/O…422 mil.
CEO Andrew:...$1.5 mil…..COO…M. Nunns…$1.5 mil.
2010 EOY Prod: 166,148 boe/day……S/O…460 mil.
CEO Andrew:...$1.9 mil…..COO…M. Nunns…$1.8 mil.
2011 EOY Prod: 168,801 boe/day……S/O…467 mil.
CEO Andrew:...$2.5 mil…..COO…M. Nunns…$2.5 mil.
2012 EOY Prod: 153,931 boe/day……S/O…476 mil.
CEO M. Nunns:...$2.4 mil…..COO…H. Foulkes…$4.1 mil.
2013 EOY Prod: 123,995 boe/day……S/O…486 mil.
Ret. CEO M. Nunns:...$6.4 mil…..New CEO…D. Roberts…$4.8 mil.
2014 EOY Prod: 100,000 boe/day……S/O…500 mil.
CEO D. Roberts…$????
2015 EOY Prod: less than 100,000 boe/day……S/O…greater than 500 mil.
Ret. CEO D. Roberts…$????…..New CEO…Al Bundy…$ALOT
2016 EOY Prod: less than 100,000 boe/day……S/O…greater than 500 mil.
New CEO…Al Bundy…$ALOT
We will see, but according to Genscape’s “Time for a Cushing Oil Renaissance” article, the inbound pipeline capacity just exceeded the takeaway capacity at Cushing in Q4-a situation that will persist for much of 2015. Crude inventories are on the low side there right now but did build 3.0 million barrels in the last week while there was a net draw in the U.S. If inventories continue to build there, then that has the potential to drive up differentials of WTI vs. LLS, which would tend to support Midwest refiners. Crack spreads are too difficult to predict, analysts look at this everyday and their guesses are right as often as they are wrong, which leads to a lot of unnecessary volatility in the refiners.
I can't be "wrong" because all I stated was right based on past data. If your "guess" is right, that there will be a "world recession", then PWE goes to zero.
Guess again Nelson, the YoverY change in WTI is only -33.6% IF WTI averages $65 this month. I have data that goes back to 1983 where this has happened many, many times with little correlation with the economy or stock market. PWE has collapsed because of poor fundamentals.
BTE is partially hedged, 24% by volume for 2015, at WTI of $65 and considering the hedges, they will be borrowing to maintain the so called "divvy" in 2015 or cut capex to where they will be looking at significant production declines. This is not my opinion, this is FACT, as anyone(that knows what they are looking at) can see this from their recent news releases.
BTE management has already said that they would hold the so called "divvy" at WTI of $US80, and they would not even answer what they would do if WTI went to $US70. Well with WTI at $65, obviously some adjustment will have to made here very soon.
BTE management did say that but WTI is already well below $US80, and they would not even answer what they would do if WTI went to $US70. I would not assume that the so called "divvy" is safe here.
"Our 2015 plan is to manage a balanced CapEx cash flow program, with CapEx plus dividends in line with cash flow."
" Over the long-term, our objective is to fund our capital expenditures and cash dividends with FFO."
while marginal producer PWE says:
"We will give you a "divvy" no matter what."
Lightstream only down 9% on this "buyback news." It is Exhibit A as to why you should not announce a buyback while obviously having no capital to back it up.
Analyst Note 11/06/2014
Across Morningstar's coverage of over 1,500 companies, Penn West presently sits comfortably among the top 10 highest-yielding stocks that we cover. Currently trading in the $4 dollar range, Penn West’s dividend implies a yield on its stock of over 11%. The annual liability associated with this obligation amounts to roughly CAD 225 million in 2014 and rises to CAD 276 million in 2015, a truly remarkable commitment when viewed against our estimate of cumulative cash flow generated for the 2015-2018 period of negative CAD 21 million (excluding potential non-core divestitures, which appear likely if not essential to sustain operations).
Interestingly, when pressed on its earnings call regarding the sustainability of its quarterly dividend under a scenario of sustained lower crude pricing, not only did the company declare the dividend perfectly safe and essentially off the table for consideration, but also went a step further in implying it would sooner rein in investment in its assets than so much as consider a cut to its dividend.
Their is an investment case to be made here, but PWE, as a marginal producer, has to eliminate the "divvy" and go into the capital preservation mode. Lightstream and PGH recently continued their foolish "divvy" policy, "pay you while you wait", and they are getting crushed.
You left out this part of your cut and paste:
"Some oil executives have challenged that view. Marianne Kah, the chief economist of ConocoPhillips, said the price of oil would need to plummet to $50 a barrel “to really harm [shale] oil production.” Bob Dudley, BP’s CEO, said the cost of using the new extraction techniques has come down recently, and noted that the biggest victim of low prices are Russian oil companies, which have been caught in the middle of a dispute with Moscow and the West over the Ukraine crisis."
Lightstream's stock performance today is Exhibit A as to why PWE should eliminate the "divvy" on Nov. 5 rather than kicking the can down the road by borrowing/selling assets and diluting to pay it.
Yeah, but Ohio, Nelson says that traffic "has doubled" on the roads he drives on, and Georgia says that the gas station "is crowded" where he rides his mountain bike. This is groundbreaking research that no one has ever used before.