the only reason these shares went to $7 is that they were going to develop a gold mine which the federal government denied permits for. This company is only marginally profitable and produces one product in significant quantities and that is copper which at current prices is not really profitable for them as costs and price are about the same. So reserves are being sold at near cost.
There is no real reason to own a mining company as none of them have performed in recent years as the stock market indexes have climbed up and up around the world.
Even China which has built too many residential highrise towers all over the country is slowing down. In fact in a report this week China's growth for 2015 is declining to a level not seen since 1990, that is 25 years.
Students really do not make much money working part time and most parents have limited budgets so student housing has to stay competitive with private apartments and dorms and those are not really raising prices much. This is why public storage has gone up 100% in price over the last four years while this student housing reit has gone down for four straight year.
Chris, you are in a dream world. No one pays the cap rate you are suggesting for this to be a $10-12 stock based upon what the students are paying to rent the accommodations in this portfolio. Ask yourself why this portfolio has gone down for four straight years while most real estate equities in North America have gone up. You have no share price appreciation with this equity in four years and 9 out of 10 other reits not only distribute similar distributions but they also have share appreciation for each of the last five years. Any one investing in this portfolio over the years has seen no appreciation compared to almost all other reits. There is a reason for that. Most tenants in most reits have 5 year leases with adjustments each year in the rent paid and expense paid. When you have been in a location for 5 years you do not want to move. Tenants for a year or less move all the time and turnover is very high. You have to sell your real estate each year to a new tenant. There are too many better real estate businesses to invest in.
CEO of PWE said the "bond holders are like the sword of Damacles around our next at this time and I hope we can get it resolved sooner rather than later".
What I heard from CEO.
Said they are going to breach their covenants with bond holders (lenders).
They are going to spend 2015 in discussions with the bond holders to attempt to modify
the covenants but does not have any idea on the outcome which is logical response.
He said he does not know what these creditors will ask for.
I wish we knew how much in bonds have been acquired this year by vulture type
investors that would like to put them in default on the bonds and take over the company
in some type of court proceeding.
Will that happen? No one knows.
About the dividend the CEO said we will have to look at it.
So it sounds to me that the dividend could be cut out. That would not bother me
personally, but if that happens we have to assume the share price could drop
CEO does not want to unload any acreage as the prices are not good at this time.
So anyone forced to unload acreage to pay down debt is going to get clipped.
CEO said company is not built for these prices it is built for $70 or above.
I heard on Bloomberg last night that Iraq was going to up oil production because it
needs any money it can get its hand on, so production in the Middle East seems
like it is not going to go down but go up. So how long is oil going to be below $70?
Shell Oil today through its CEO said three years which if he is correct will kill PWE.
I personally wish that ISIS would attack the Saudi oil fields but I think they must be
well protected by the U.S. aircraft carriers in the Middle East and we probably have
a defense department satellite that sits on top of the Saudi oil facilities and monitors
CEO of PWE said he sees $55 per barrel this year. Is that optimistic since price is
close to $45 at this time? He said his opinion is just that. CEO seems to think U.S.
production which has been increasing each month will reverse in second half of year.
I wonder if he is right.
The real problem is Venezuela, Russia and Middle East production in second half
it was a 30:1 reverse split so shares are now worth less than 4 cents for the old share count.
Remember, this is supposedly a tech company which is sited in Canada and run by former
oil company management. Any good company in the tech space wants to be in silicon valley
and network with all the venture capital guys in that region to get to the next step. These
wantabees are not going to survive that is why the shares have been in decline for the last
12 months while most tech companies have been climbing in share price.
They have been unable to grow followers during the last year.
This is a bunch of hype with no substance, it is a promotion that has been in free fall, nothing
more. It will run out of money and close is my guess.
the Saudi Oil Minister is in Davos, Switzerland and he told the conference of world's billionaires that the prices will start to go back up in a month. I think he knows more than just about anyone on the subject. He obviously feels that the price below $50 per barrel is an overshoot on the down side. Still if oil stays at $50-60 for the next year there is going to be a great deal of hurt.
This basically shows that this management is not very effective.
All my other six holdings in energy are hedged as to about 33%-50%
a price target on these shares of 70 cents by TD Securities is just terrible. I imagine lenders will reduce the lines of credit or extract higher rates of interest. Basically all the analysts in the last 30 days are saying they see no hope for these shares. The problem is that this is a Canadian company and in Canada you do not have to file with regulators until you have acquired 10% of the shares. This allows a bottom fisher to acquire 10% of the company at very low prices and then make a very low offer, say $2.50 or $3.00 for the rest of the company. Even if the shareholders and board to not like the price, all the investors that came into the company at under $2 per share will sell as they are short term investors. It is the long term investors that will get killed as these shares go lower every day. I personally own investments on seven other energy companies and five of the seven have gone up in price the last two days, but my two Canadian energy companies have gone down both days.
I suspect the Canadian producers will fall further on bad market days if they are unable to go up in value when other energy stocks are rising.
no one wanted to invest in the company with a large stake when oil was $100 per barrel, when do you think oil will reach $100 per barrel: 1 year, 2 years, 3 years?
No one that has looked at the infrastructure costs, time to build infrastructure or looked at the oil and gas engineering was willing to invest during the previous two years when oil was at high prices.
This might be a story in a few years but it is early and there will be more bad news for energy company and their prices in 2015. This stock is not going up in 2015 but it is going down, remember this prediction.
Fracking takes lots of water and Australia is a very dry climate. I spent three months going everywhere and water is a problem, do not fool yourself. Take a look at annual rainfall in areas outside the Northern Territory.
BP this morning said they see oil price at $50 area for the next three years.
Look, the U.S. has overproduced natural gas and the price has been depressed
for 5 years now, so BP might know what they are talking about.
$50 oil would destroy the MLPs that took on too much debt.
Look at British Petroleum (BP) this morning. They said they see $50 oil for the
next three years. These guys know what they are talking about.
Yesterday, I spoke with the president of one of the oil companies I invested in
with 100,000 barrels a day of production and asked him why he does not cut
production 10% and use the money to buy back shares. He said he has to
keep production up for the cash flow to debt service the loans and for the loan
covenants. If this is the situation then production is not going to drop that much.
I am in many oil and gas investments from Linn Energy to Chesapeake Energy to small Lighstream Resources to the pipeline companies and MLPs and all of those companies have had insider buying during the last 90 days. I am talking about CEO or Chairman buying hundreds of thousands of shares.in each company.
Ask yourself why that has not been the case with the management and board of PWE. The only answer I can come up with is that they do not see the value in terms of the risk. By the way, those other companies hedged significantly, so that might be an issue.
Still it is not a good sign that PWE insiders have not been buying six figures amounts of shares at this price.
I think you need to face reality. Oil was at $100 per barrel for the last few years and no major partner invested in this Australian company.
So now with oil going to be significantly below $100 per barrel, perhaps $50-75 for the next few years, who is going to put up money?
There is no pipeline infrastructure where this land sits. Do you realize it took years and years for the U.S. to build out its pipeline system (50 years, from 1950-1960 to today), and still the pipeline operations in the U.S. have $50-100 billion they need to raise for projects for the next 5 years.
The price of this company has been in free fall all year as I have previously written and 2015 looks no different.
Yes, the energy sector has been in free fall and this CLMT is behaving no different.
Also, four of the last six quarters of operations they have not been able to cover their distribution from operations. Having below 1.0 coverage by a significant percentage for the distribution for 4 of 6 recent quarters is not very good.
I would not be surprised to see many energy related MLPs fall another 10-20% and energy corporations another 10% when the 4th quarter of 2014 and the first quarter of 3015 is reported.
48 dollars per barrel is cost
but the big problem is that they have borrowed almost $4 billion and it is due over the next 10 years with 1.2 billion due in five years
Sorry, but you can not shut wells down without incurring significant expense to shut it down. Then you have all kinds of expense to bring production back up. Canada and no other country has a light switch that turns off wells with the flip of a switch. I suggest you research the cost and problems with shutting down a well. No one does that without significant money.
Any ideas. U.S. is producing 1 million more barrels of oil in 2015 than 2014 and oil is now
being stored in tankers. Europe and China are predicting slower growth in 2015 than 2014
so where is BBEP headed. $4, $5?
Unfortunately, ever oil producer has a billion on up in debt and cost to debt service in 2015
requires double the production that was required when oil was $100.
Linn Energy has what $12 billion in debt, CHK has $12 billion in debt, etc.
So how low can this go?
Will they eliminate the dividend at the end of the first quarter?
What do investors think?