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SGY vs WCP (TBE) - wildy optimistic base assumptions and much higher costs per barrel CAD $ 48 vs. CAD $ 28,60From latest company presentations: 1. SGY assumptions: (1) Based on guidance pricing: WTI US$65.00, CAD/USD FX $0.81, WTI CAD$80.25, WTI-to-EDM differential CAD$3.70, EDM light CAD$76.55, $2.95/mmbtu AECO (page 28) 2H 2015 Operational Netback $28.91/boe (page 5) With a cost p/b based on their own assumptions: CAD $ 76,55 - $ 28,91 = $ 47,60 So basically their WTI assumption is likely much too high and EDM differential unrealistically low. Meaning their 100% pay out ratio is bullshit unless oil recovers in a hurry. 2. WCP assumptions: 2015 WTI US$56.00/bbl, C$/US$0.82, Edmonton Par Differential (US$6.00/bbl) and AECO C$2.50/GJ. (page 2) 2015 netback ($/boe) – Operating $37.05 – Cash flow $32.85 Their cost p/b based on their own assumptions is: CAD 65,70 - $ 37,05 = CAD 28,60 based on opex and CAD $ 32,85 based on CF But if you compare both opex figures (SGY-WCP) there is a difference of CAD $ 47,60 - CAD $ 28,60 = CAD $ 19 - that's huge. I am beginning to understand why SGY has declined so much and maybe will decline more? And perhaps why the CFO left.. They're greatly depended on a rebound in oil prices and if current prices persist and they keep the divvy they will start adding back debt in a hurry. What surprises me the most is that TBE, while having more debt and lower non hedges revenues p/b I know, only has OPEX+Transportation cost of CAD $ 19,83. I was really surprised of the high cost p/b of SGY. R. |
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