What happens to these shares the next time they announce another impairment charge? Not worth holding the shares for the dividend if these shares continue to fall.
The problem is that the U.S., Saudi Arabia, Russia, Iran and Iraq are producing more oil this quarter than same quarter last year and that has been the case all year.
With a surplus of 1 million barrels a day in the U.S. and another 1-1.5 million barrels surplus from the rest of the world, oil is going to be in a $40-55 price range for the rest of 2015 and most of 2016. Even at a price of $60 in 2016 and 2017 COSWF is not profitable and the Canadian government tax coffers are dropping without higher energy prices and therefore royalties. The company should have cut the dividend to zero, but is paying out funds to shareholders when there will be no profits.
Why hold this company when the share price will crater when the dividend is eliminated? The share price will drop in half when the dividend is eliminated. That would be the time to buy shares. The problem is the debt and the payment of interest and a country that will have to raise taxes to pay its bills. Selling energy at half the price in 2015 and 2016 that the energy sold for from 2010-2014 destroys the taxes the provinces and national government receives from the energy companies. There is a reason the Canadian dollar has fallen from parity with the U.S. dollar to 75 cents during 2015.
Look at the balance sheet and the cash flow statements for the last three years. Yahoo makes them available and they are also available at the company website.
They are not taking on debt for anything other than adding ships. Look at the total company debt for the last three years and look at the fixed assets: ships.
Suggest you take a tax and accounting course before you invest in anything.
They get DTVs 40 million customers in North and South America and the ability to market to them and expand the market. Also, when you have combined 45 million TV customers between the two companies you have tremendous purchasing power clout for tv content. Also, the pay tv market has only half the penetration in South America compared to North America so you have tremendous growth potential down there.
Why Putin is considered to have a net worth that is double that of Bill Gates?
According to people that have researched the topic and written a book on it
and confirmed by a former top Russian banker this is the case. Basically Putin
and 20-30 oligarchs (thieves-gangsters) own 90% of the country and if you
cross Putin or take him on you end up in prison or worse and/or have your
company taken over.
Many western companies have tried joint ventures and eventually give
up. Ask yourself if you have any legal rights or recourse in Russia.
Investors in oil and gas should ask themselves if their investment is profitable at
$47 oil and $2.50 gas. Most companies are not. The problem is that Saudi
Arabia and Russia and U.S. shale producers are flooding the market so they are
selling their assets (production) at half price. As long as these idiots do not cut
production and keep drilling at the current pace energy will be cheap.
If they filed suit against their advisers, lawyers and accountants they would have released a news release on the lawsuit on something like this. Basically the Board of Directors is putting its head in the sand and collecting their fees and stock options. I told the board in my letter to them that it is basically negligence to ignore this issue and a lawsuit against their professional advisers.
Last year CHK sold 7% of production and acreage for $5 billion. The balance of the company is now worth a little more than that. What we should all wonder is why the CHK management did not buy shares at the current price and why they failed to give notice according to the bond indenture agreement which cost the company half a billion dollars in a court decision against them last week.
The news release today said nothing about either of these matters. Why did the company not sue its accountants and lawyers that do the drafting and reviewing of these agreements and charge millions of dollars every year and they obviously failed to draft a letter to the management team warning them about the deadline in the bond offering materials.
I wrote a letter at the CHK website to the Board of Directors asking them why they did not pursue legal action against their accounting firm and lawyers that were involved with the bond offering that ended up costing CHK almost 1/2 a billion dollars because the company obviously did not know what the agreement said in terms of the notice requirements. I also asked why the board of directors why they authorized the purchase of $1 billion in shares and then the management team ignored them and never purchased a single share.
Do I expect an answer or a phone call. No. But the contact information did ask for a phone number and it was provided.
I am expecting a bill that will lower length of sentences which will end the
20-30 year prison terms for drugs and other crimes that do not involve
weapons. This will end the prison crowding that has helped the private prisons.
When that bill is introduced and the Speaker of the House said today he
supports such a bill, these share could shed 10% on the fear factor. I
would sell shares at this level and wait for the dust to clear.
At that time the board of directors authorized management to buy back $1 billion of CHK stock.
It never happened. Any one wondering why management never thought the price of the shares
justified buying CHK stock? If management does not buy back shares what are shareholders doing
buying? I thought the shares were cheap at $15 and bought more, then at $13 I bought more and
then at $10.50 I bought more. What does management know that they failed to buy any shares
back during the last 6-9 months? Maybe Iran is going to enter the international oil market soon
and drive down prices of oil further.