Energy Investing - MEG - Quick read through to CVE - Energy Investing - InvestorVillage


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Msg  341033 of 353334  at  7/23/2021 10:45:44 AM  by

romm


 In response to msg 341007 by  Riskyinvestor
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Re: MEG - Quick read through to CVE

I also looked very quick, but with different results.
Please don't kill the messenger as people know that I'm critical equally to any company, no matter if I own it or not. Same way.
 
So MEG assets are great with great potential....but management performance is terrible...or awful, pick your own definition. 
 
$96mm FCF while $87 mm hedge losses, not paper losses, but real cash losses.
This is not the whole story.
MEG has sold non-core industrial lands near Edmonton for cash proceeds of approximately $44 million.
So I assume without that sale FCF would have been mere $52mm...for a company of $2.5B market cap and $5.5B EV. Please double check if asset proceeds were included in Q2 FCF.
 
How would you characterize the management performance that earned $44mm while lost $87mm, or two thirds? Terrible or awful?
 
But many investors have shrugged such performance and instead calculated how much MEG would have earned with no hedges???
Folks.....wouldda, couldda does not work. We all wouldda been best investors of ALL TIMES if we stopped investing in energy in 2014 but put all our money back in in March 2020, right?
 
if such losses would be for MSFT or GOOG who have no debts and flush with cash, it would've been just less cash, but for MEG with $3B debts? They need real cash right now, but lost so much instead...and will continue loosing at same rate or more in Q3 and Q4... 
 
2022....Some  "rough" estimates are going even as high as $1B for 2022??? for 90K bpd production...
Oh if that would be realistic, CVE would have made $7.5B plus from refinery business.....$9B??? Realistic? 
 
Extrapolation is not right, pretty simple. You may approx. extrapolate based on $44mm FCF excluding asset sale plus $87mm hedge loss in Q2 for a total $131 mm, or $524mm annually.
Q2 WTI was barely below $68. So at $70 the total hypothetical  FCF is $550mmm...far away from $1B. And still hypothetical assuming $70 oil, same very low WCS diffs and no hedges. All three at the same time are unrealistic as WCS has started to widen and MEG will continue hedging for capital programs as shown in presentation.
 
Maybe some investors should tell the management to stop this nonsense and focus on making money instead? Then a great potential would've been realized?
 
Again, don't kill the messenger, I don't differentiate my own stocks from anything else, just my view right or wrong, could be be wrong.
I read many names for potential investments, just sharing.
 
The stock is reacting positively after this report which is the very good sign for MEG and for others. GLTA who owns it.
 
romm


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Replies
Msg # Subject Author Recs Date Posted
341037 Re: MEG - Quick read through to CVE FUMONEY 19 7/23/2021 10:59:32 AM
341049 Re: MEG - Quick read through to CVE BigHatNoCattle 9 7/23/2021 12:08:55 PM
341059 Re: MEG - Quick read through to CVE Riskyinvestor 29 7/23/2021 1:15:24 PM
341067 Re: MEG - Quick read through to CVE nipper_dog99 0 7/23/2021 1:42:02 PM
341072 Re: MEG - Quick read through to CVE smittyfrmpa 8 7/23/2021 2:01:23 PM
341160 Re: MEG - Quick read through to CVE alertmeipp 1 7/23/2021 10:33:20 PM


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