AHTL hedging covers pretty much all of ATHL production so yeah that's nicely hedged.
As far as the rest of ECA's oil output, it is not hedged as you correctly pointed out. But it's far from obvious (to me at least) that this will result in the 'huge losses on the horizon". I'm curious... What do you expect ECA's cash costs of production will be nest year in their newly acquired fields (ex-ATHL of course since that is fully hedged)? Also, what do you expect spot oil prices to trade at in H1/H2 2015 anyway?
Not nearly as big as I would have liked to see but every little bit helps
@@@@@Spyglass Resources Corp. Announces Sale of Red Earth Property CALGARY, ALBERTA--(Marketwired - Nov 28, 2014) - Spyglass Resources Corp. ("Spyglass", or the "Company") (SGL.TO) (SGLRF) announces that it has entered into a purchase and sale agreement to sell its Red Earth assets for $12.3 million (prior to normal closing adjustments). The transaction closed November 28, 2014 and the proceeds will be used to reduce bank indebtedness.
Dream on... US Bakken Beauties will collapse long before Tarsands Kings like SU and COS.TO face any threat of elimination.
It will be interesting to see how railroaders perform this quarter. All hit hard today because of concerns about lower car volumes in oil-by-rail and fracking sand delivery. But that is a relatively small portion of overall traffic (~10%). Meanwhile the cost of fuel - their biggest operating expenditure - is dropping while total traffic is growing along with the GDP.
Meanwhile you and your permabear pals are all short SPY... great strategy you geniuses got going there haha. Better do like the Chinese and buy oil now because these firesale prices won't last... I give it six months max
Reduced car volumes of frack sand if shale oil drilling slows, and perhaps less tarsands oil moving by rail (although without enough pipeline capacity that's doubtful). Counter that trend with lower operating costs on lower fuel prices. So the question becomes... which affects the bottom line more... a drop in oil transport-related car volume or cheaper fuel to operate the trains hauling everything around.
I sold part of my CNR.TO holdings earlier this week (figured there would be a negative reaction on bad OPEC news), but looking to buy that back if it drops down into the mid-70's. A positive KeystoneXL vote or continued drop in oil prices should do it....
Stay tuned for next Q earnings... should be very interesting especially for CP.
ECA is only ~5% of my portfolio so I don't mind boosting that at these firesale price levels. Actually my position is running above breakeven since I sold part back when it was trading high... ya know... that buy low sell high thingie...Reduced my CNI holdings this week and decided to rotate that into the O&G sector seeing as it's been hit so hard. I expect shale output falloff at sub-70 prices to re-balance supply-demand in relatively short order so unless the world economy tanks prices should recover in the next few months.
I posed the same question about the ATHL deal. Normally the acquirer would demand an escape clause be written into the purchase contract. And if you check my posts I stated even before the ATHL deal that I preferred management to prove their earlier changes were working before any further acquisitions but they obviously had a different view. AS far as ATHL goes, at least the production is nicely hedged... maybe that is what they were concerned with.
I disagree about their hedging history being poor ... in fact it got them through the natgas rout very cleanly.
As far as their current hedges, natgas appears to be highly hedged so that locks in cash flow on that side or production. Until the buying spree they started earlier this year oil output was coming online quite slowly so there was no need to hedge. Why they didn't do so as they traded in oil-heavy assets I don't know... I suspect they see the coverage on natgas side as sufficient overall, and also may believe their cost of new oil production is low enough to still profit. And as I pointed out, ATHL is locked in nicely too.
I agree it seems reckless to drive debt up, but at this point, unless you are convinced low oil prices are here to stay more than a year, I think the upside greatly outweighs the downside. Anyway good luck whatever you decide
You moron... what part about the ticker ECA.TO don't you understand? I don't know why I even bothered temporarily taking you off ignore to read your post. Never again...
Do you ever respond to questions or do you just like to troll? And for someone who purportedly goes to rock shows you seem to be lacking in any basic knowledge of or interest in the art of intoxication. A true case of High Class In Borrowed Shoes if i ever saw one....
What if you drink and smoke just under the limit of each and drive? Is there any law about the combined level of THC and Alcohol? #$%$ am I glad I don't live in USA.
I read somewhere recently that people with low IQ tend to overestimate their abilities while those with high IQ tend to underestimate theirs. So no, it's not really amazing at all...