- EPS of -$0.09 came under expectations of -$0.07.
- The Hangingstone Project is performing very well in terms of production.
- The company is under financial stress with debt maturing in May and November 2017.
We learned this morning that Philidor is already winding down its operations. Of course, this also means shredding all documents and files from the company.
Something is not right here. Stay out of this one: don’t bet on the recovery of Valeant Pharmaceuticals so fast.
- Raging River has a very low leverage and should therefore be able to raise credit.
- The netback of the company is one of the best of its peers.
- The shares currently trade at the NPV of the company’s reserves.
- The company has substantial related-party transactions.
- The company owns crucial companies with Blue Pacific Assets, which is owned by insiders.
- Management should address these concerns and close these business ties.
- Cenovus has SAGD projects with very low operating expenses.
- A steam-to-oil ratio (SOR) of 3.0 is the norm in the industry.
- Athabasca Oil has a SOR capacity of 3.5 in its Hangingstone project and thus has higher opex.
I called on Seeking Alpha that the recent rally in the stock price of Athabasca Oil would help clear the massive short positions.
Unfortunately, the shares sold short decreased by only 350,000 as we saw from the Top TSX Short Positions published today. I thought that the push over the 50-day moving average of the stock price would mean a greater decrease in the amount of shares sold short after a double bottom. The stock was put back to its place by the 200-day moving average but should be fine in the short-term, as long as it can hold over the 50-day moving average.
As such, I now believe the only thing that will lead to shorts covering their bets will be a sustaining rise in the price of oil. Therefore, patience is warranted. The stock will most likely test its 50-day moving average.
Disclosure: I am long ATH.
- The company will always carry a heavy discount because of its operations in the Middle East.
- The NAV of the company clearly signals that the company is undervalued.
- On the other hand, the company is fairly valued compared to its oil production.
- The company has an NAV of over $3.1 billion.
- The NPV of the company’s reserves is over $1.6 billion.
- The long-term potential of the company will be more profitable for current shareholders.
- Speculation on M&A activity should help boost the stock price in the short term.
- The company has significant proven and probable reserves and acreage in Alberta.
- The company has a substantial cash position and a good balance sheet.
- Liquidity will be very tight if the sale isn’t completed by year-end.
- The company could boost its capex.
- The company could erase all concerns of a cash squeeze.