Have a nice day.
Facing a 30 percent slide in the price of crude in the past five months, Encana Corp. (ECA) Chief Executive Officer Doug Suttles still has his foot on the accelerator.
The gas giant capped a year of asset sales and purchases worth more than $14 billion to focus more on crude, just as oil fell into a slump. Suttles remains confident in the shift and plans to expand drilling to capitalize on properties that promise higher returns, even after crude prices declined from a high in June of about $107 a barrel to around $75.
Get $18 now and make 33%. Looks great now doesn't it? Except for those on board that bought in the $20s.
What will they do to survive? You know management will do what ever they can for their own pockets in the short term, without a care for owners. It always goes that way. Check out the history of Delta Petroleum Corp. now defunct.
They already entered into Contracts to drill. They entered into those contracts at premium prices, because at the time oil was high and drillers were hard to come by. Now oil service companies are starving for contracts to drill. So ECA over paid for Permian, over paid for drilling, oil price is down to $65 from $100 when ECA valued assets, now if the quantity of oil assumed is not there, ECA maybe in trouble for years to come.
ATHL officers and shareholders doing the money dance right now. They new something...right. I doubt if they knew of oil price crash coming. But they probably had a good idea of recoverable reserve in Permian. SCREW JOB!
Is it $13.50 or lower? Maybe even $11!
Now that others are cutting back and ECA full steam ahead. WATCH OUT for that ICEBURG!
Sure, they will hit a lot of oil. However, in purchase of ATHL they did not assume $65 oil in valuation. AND, what quantity did they assume? If you over pay for an asset you lose. So don't get over excited when production stars. They need the price and quantity they assumed in financial valuation. Right now it looks like they blew it.