# Pengrowth Energy Corp (PGF)



## Sherlock

Oil and gas company from Alberta with a very attractive yield. What's everyone think? Good time to buy in? Is the distribution safe?


----------



## zylon

not only Alberta but also off Nova Scotia
production weighted 50% oil; 50% gas
monthly div (0.07) yields 9%
estimated 2011 cash flow of $1.95 per share will help maintain the high dividend*
I own a couple hundred shares of PGF and the only reason I'm not buying more right now ... well, i can't buy everything 
_____________________
* commercial break *
I highly recommend Pat McKeough's _Canadian Wealth Advisor_
It costs me $15.49 per quarter; new subscriptions might be a bit more. CWA has rated PGF as "average / buy" for as long as I can remember. Note that "average" is a notch higher than many others he recommends which are rated as "extra risk".
http://www.tsinetwork.ca/publications/canadian-wealth-advisor/canadian-wealth-advisor/


----------



## blin10

i own a ton, even if yield is lowered it will still pay decent dividend......


----------



## Sherlock

Well I bought a couple hundred shares. Let's hope it'll be a good long-term hold.


----------



## webber22

Does anyone know why this stock has fallen down to 8.48 ? The yield now is close to 10%


----------



## Eclectic12

webber22 said:


> Does anyone know why this stock has fallen down to 8.48 ? The yield now is close to 10%


Not sure ... though with 50% natural gas, which is on the low side, that could be part of it.


Cheers


----------



## CashMoney101

Could also have something to do with their acquisition of NAL Energy. NAL has been drifting up since the announcement but PGF appears headed in the other direction. No doubt the natural gas prices play into it, and could also be the fact NAL was losing money last year so now PGF has absorbed all of that nastiness.


----------



## al42

I don't think so, I think it's Nat. Gas prices going down every day. NAL goes down hand in hand with PGF every day
now that they are taking NAL over. NAL already cut it's dividend and was punished for it, the market is expecting 
PGF to cut at some point as well and will punish PGF. 
It's a double whammy for NAL holders like me. Should have sold my NAL at $8.00 when the take over was announced.


----------



## blin10

yap all nat. gas companies sinking, pgh,erf,eca,key,etc... nat. gas is the future in my opinion, i saw on cnbc they have nat gas stations to fill up trucks which run on nat gas, problem is it's far away into the future... I bet in 10-20 years from now they will slowly start switching to it


----------



## Sherlock

Well dividend is being cut to 4c/share and stock fell 3% today. Still a good yield even after the cut.


----------



## swoop_ds

Anyone think this stock is worth buying to add to a drip investing strategy?


----------



## blin10

this is one of my dogs in portfolio, planning to average down ... not sure if it's worth buying, it keeps dropping


----------



## al42

blin10 said:


> this is one of my dogs in portfolio, planning to average down ... not sure if it's worth buying, it keeps dropping


I've averaged down a few times already ... hasn't worked out yet but it's gotta be close to the bottom?


----------



## My Own Advisor

EPS is not good. Net income is down significantly since 2007, 2008. Not buying but might work out for some on a whim and if they time the bottom - if at all possible. I already have one high flyer in my portfolio, that's enough: CLC.


----------



## maxandrelax

Any thoughts on where the bottom will be?


----------



## webber22

PGF had a good opportunity to break down under $5 but didn't. Margin calls would be triggered if it did go under $5, so someone with A LOT of margin is keeping it afloat maybe.


----------



## maxandrelax

Let's hope you are right. Seemed to hold $5 today. MACD is turning up in good news...


----------



## thompsg4416

Small gamble that could pay off.. I think its oversold at this point. 

I bought a couple hundred shares at just over 5 bucks.. Good yield but not a great finances..


----------



## ban

4.22 today
Does anyone think this stock is worth buying at this price? 
Thx


----------



## AltaRed

What is happening to their cash flow? If they are eating into their business (using debt or selling assets) to pay the bills, they may not outlast the current Nat Gas and oil pricing environment


----------



## blin10

it keeps sinking, damn I'm in paper loss on this one, should off sold it when I wanted to but got greedy, now paying for it...


----------



## ban

I’m still scared to get in, but might be a good long term entry point (if it survives all this)…


----------



## maxandrelax

ban said:


> I’m still scared to get in, but might be a good long term entry point (if it survives all this)…


Insiders have been buying all the way down, most recently in nov/dec. Not huge amounts, but more than me. This is my super dog. I has done nothing but go down since I bought it, and I have been DRIPing all the way. Long term horizon. GLTA


----------



## Sherlock

This is my single worst performer, I bought at over $10, fortunately I didn't buy too much. I put in a limit order for $3.90 today but just missed it. Will probably put in another limit order tomorrow.


----------



## liquidfinance

For those who are holding / adding to positions are there any fundamental reasons to believe in the stock?


----------



## webber22

The stock is rebounding nicely today, up 4%, probably due to this article
Earnings are out on Friday.


----------



## Ethan

Excluding goodwill, Pengrowth has a net asset value of $3.52 billion, or $6.93/share. This represents a 65% premium to the current market price of $4.20.

Also of note is that free cash flows in the first 9 months of 2012 were positive:

346,414 - Operating cash flows
44,990 - Add back reduction in working capital
(373,519) - Deduct capital expenditures
17,885 - Free cash flow

If PGF didn't pay a dividend, they would be generating positive free cash flows.

This one is tempting.


----------



## AltaRed

Careful about NAV on resource stocks. Every time commodity price changes, asset values theoretically change. Resources/reserves in ground are eliminated when below the breakeven point to produce them, and associated PPE with those reserves can become a liability if the reserves cannot be produced. Whenever one looks at NAV, determine if current commodity prices are lower or higher than those assumed at the last reserve valuation.


----------



## Addy

Considering purchasing Pengrowth for the yield. Anyone here make a recent purchase?


----------



## thompsg4416

Addy said:


> Considering purchasing Pengrowth for the yield. Anyone here make a recent purchase?


No but I do follow it a bit. Would have been better to purchase late last week. Its been on a bit of a run lately although still quite under its 52 week high.


----------



## swoop_ds

Anyone think that this stock will ever return to what it once was? It's gained what it lost in the last year but there is still a long ways to go to $10+ that it once was.


----------



## yyz

There is a good case for upside if they get the Lindbergh built out on time and budget.I think that what they say in the financial results next week will hopefully answer some questions.
I've been riding this one in both TFSA 's and have done well with it.


----------



## Fraser19

I am wondering what you guys think of this stock today. I haven't been able to find much for uninfluenced opinions on it. 
From what I see on The Globe and Mail is that is is trading close it its 52wk low. It still pays a good dividend and distributes monthly which is nice for DRIP.
Providing from where I stand this looks like a stock that could be good for a long term DRIP. What do you guys think?


----------



## yyz

Like I mentioned above,there should be good news in the 4Q when first steam is suppose to occur at Lindbergh.I own about 9-10k shares and Drip all but 1 account.I think it has a fair bit of upside if everything goes to plan.


----------



## My Own Advisor

The 5-year and 10-year chart is scary, but buying at these levels, there is no big reward without big risk - this would be an example. Time will tell.... Personally, I would not put lots of eggs in this basket.


----------



## Fraser19

PGF is pretty far down right now, at a new 52 week low. Thinking about picking up another 150 shares to drip.
Anyone else eyeing this stock.
I am also wondering how much lower it could go?
Hard question to answer, but seems like a good deal right now, I feel that there is a lot of upside right now even if it is just a short hold. Using the drip at this cost sure does have a lot of appeal to it.


----------



## yyz

All the oil players are getting taken out behind the wood shed and having their valuations adjusted,CPG BTE etc along with PGF.
Me I'm holding and collecting the dividends until oil heads up again which it will


----------



## AltaRed

yyz said:


> All the oil players are getting taken out behind the wood shed and having their valuations adjusted,CPG BTE etc along with PGF.
> Me I'm holding and collecting the dividends until oil heads up again which it will


Providing there are not dividend cuts. Better check your holdings and see which ones are too far up the payout ratio without hedged production.


----------



## Fraser19

AltaRed said:


> Providing there are not dividend cuts. Better check your holdings and see which ones are too far up the payout ratio without hedged production.





> Dividends
> 
> Pengrowth recognizes the importance of its dividend to shareholders and remains committed to maintaining its monthly dividend of $0.04 per common share. In the event of an extraordinary, prolonged decline in commodity prices, Pengrowth would look first to decrease capital investment and/or sell assets before any reassessment of the dividend.


That is promising.


----------



## Eclectic12

Promising in terms of statements ... the question is whether the dividend cuts in July 2012 and Oct 2009 and/or any increased in production/hedging have left them with enough free room to adjust to what's happening now.

http://www.cbc.ca/news/business/pengrowth-shares-fall-on-dividend-cut-1.1260866


As for the "how much lower" - it did hit $4 in early 2013.


Cheers


----------



## CPA Candidate

If you are going to buy any beaten up oil production company, I don't think Penn West is the one you want to own or buy.


----------



## My Own Advisor

Agreed.

Although this could be a takeover target?


----------



## Sherlock

Dropped below $3 today. Dividend is now over 17%.


----------



## Fraser19

Yup the divided is massive at this time. If the company manages to get through this and drip the whole time many shares will be accumulated. 
It's really a shame they aren't really in a good spot. I love the monthly distributions and the 5% off treasury DRIP.


----------



## webber22

They put out a statement about the dividend strength, I don't think it will be cut

http://www.pengrowth.com/investors/dividends/dividendstability/


----------



## Fraser19

webber22 said:


> They put out a statement about the dividend strength, I don't think it will be cut
> 
> http://www.pengrowth.com/investors/dividends/dividendstability/


Given the current price of oil, what PGF has listed for there hedging looks good. But is it enough to get them through this tough time of servery decreased share prices and over supply of oil?


----------



## yyz

And soon Lindbergh should be producing oil as well adding up to 12,500 bbl/d production.I'm sure at this point the capital has already been spent for it so it should add to their ability to produce some more cash flow to sustain the dividend as well.


----------



## webber22

Confirmed dividend unchanged for January, stock up 6%
Half their revenue comes from nat gas 

http://www.pengrowth.com/investors/news/2014/view/1904813


----------



## Fraser19

webber22 said:


> Confirmed dividend unchanged for January, stock up 6%
> Half their revenue comes from nat gas
> 
> http://www.pengrowth.com/investors/news/2014/view/1904813


50% light and medium oil
20% natural gas
16% heavy oil 
13% NGL
1% other

Good hedging for oil in 2015, which is something nice to see. 

There are some good things going for them right now. But a few good things at bad times still leave a lot of uncertainty. 

I like them, I am not going to put any more money into them, unless there is some good forward movement. I would still like them to cut the div down and fix there finances. I can't see a better time to do it then now. If prices are low for more than a year the hedging drops by nearly 50% and they still have a lot of debt.


----------



## Canuck

So tempting to put 2015 TFSA money into this one.

Bit tempted to put equal amounts into LRE, PGF and one more massively beat down stock (suggestions welcome). Like just a small amount, $1,800 in each.

I guess there is a chance these companies could just disappear.


----------



## Valueinvestor

Tempted to dip into this but not totally convinced it will rebound like others. I could be wrong though


----------



## lostwords

Valueinvestor said:


> Tempted to dip into this but not totally convinced it will rebound like others. I could be wrong though


I am tempted as well. I might put some money in it


----------



## Fraser19

Pengrowth isn't really going up or down right now. Just sideways, I can see prices going up now that Lindbergh is actually doing something.

I have some, I feel confident that it will work out for me, but I am not putting big money into it.


----------



## My Own Advisor

Same, I might put a little bit of money here in 2015, but I was telling my wife we will be indexing more. Not sure if this qualifies!


----------



## gladaki

Any one following or investing in pengrowth ?
Looking at their financial:
The company has hedged about 55 percent of their oil revenues going forward at around $94. This will help offset the steep drop in the price in the price of oil. Gas has also been hedged at about 10 percent higher than the current market price. Meaningful production is expected from Lindburgh in the first quarter of 2015. 
What you guys say about it ?

Below looks like a big risk
http://www.fool.ca/2014/12/22/pengrowth-energy-corp-can-you-count-on-the-12-3-dividend/


----------



## gladaki

My Own Advisor said:


> Same, I might put a little bit of money here in 2015, but I was telling my wife we will be indexing more. Not sure if this qualifies!


MOA Its no where close to indexing :stupid:...Better develop a new index theory.


----------



## Fraser19

I am a Pengrowth follower and a stock holder. To be honest they appear the be well prepared for this time of suppressed oil prices. Also a massive amount of there revenues are from natural gas, which is a bonus. While I am in the negative on Pengrowth I am collecting massive dividends. Also TD honers there treasury drip in my TFSA which is nice because it comes at a 5% discount. 
I firmly believe they will come around. Lindbergh is partially online and continuing to move forward. I see tough times ahead, but they are moving forward, regardless of what the share price reflects.
But in the end, this is a stock that has been beaten down and like we saw with PWT sometimes there are major unexpected curve balls.


----------



## Fraser19

50% dividend cut.
Capex reduced by 74%
Budget based of $50 WTI

Looks good to me.


----------



## Fraser19

http://boereport.com/2015/02/26/pen...onal-results-and-significant-reserves-growth/

Some sites say the 4th quarter was good and some say it was bad. At this time I can't really tell how things are going. What I do like is that the Lindenberg project can produce oil for 30/barrel.

Any thoughts on Pengrowth's current standing?


----------



## Fraser19

Earnings seemed to hold up ok. There hedging really worked out well for them. Also on the fourth page of this article there is some good Q/A

http://seekingalpha.com/article/316...s-on-q1-2015-results-earnings-call-transcript


----------



## Fraser19

Seems like I am the only one following this stock.
http://www.theglobeandmail.com/repo...onse-to-low-commodity-prices/article26173257/

The dividend has been cut by 50% again. Starting in October it will be .01c/Quarter. Also they have cut the DRIP which offered a 5% discount. 
All good moves, I am happy to see they are doing more to cut costs while they still have good hedges.

They have been talking about 600M in asset sales for about 9 months now. Hopefully that happens soon, according to the statements they have made they would put the proceeds of that sale straight into there debt. With 2.035 billion of debt 600M paid off would be a huge amount.


----------



## Eclectic12

^^^^

Been too busy to keep up with them lately.

Thanks for the update.


Cheers


----------



## yyz

The dividend has been cut by more than 50%.
It's going from $0.02/month to $0.01 /quarter.


----------



## Fraser19

Ah yes, that is true.
When I first read it, I thought it was .01c a month.


----------



## Sherlock

This is one of the dogs of my portfolio. I have several hundred shares with an ACB of around $4. No point in selling now though.


----------



## lostwords

Sherlock said:


> This is one of the dogs of my portfolio. I have several hundred shares with an ACB of around $4. No point in selling now though.


same here.. I was dripping...


----------



## Fraser19

PGF sure has had a nice rally over the last month.
I found this interesting, http://www.fool.ca/2016/03/30/this-billionaire-just-bought-a-huge-stake-in-pengrowth-energy-corp/


----------



## Fraser19

http://www.marketwired.com/press-re...interest-on-its-lindbergh-thermal-2183330.htm

Looks like they won't be breaching the debt covenants in Q3.


----------



## hollyhunter

PGF.TO has been showing support at 1.91 and resistance at 2.32. From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and NEUTRAL in mid-long term.


----------



## AltaRed

hollyhunter said:


> From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and NEUTRAL in mid-long term.


It doesn't take technicals to know that intuitively. Most oil stocks have gone bullish short term due to OPEC cut euphoria, but they are likely to be disappointed longer term. 

US oil production has already recovered (increased) by some 300-350kbpd from its lows 2-3 months ago and OPEC cheating (and Russian production creep) will likely start before the Spring 'rush'. On top of that, you have the likes of Husky, amongst others, talking up their increased capex program for 2017 to exit 2017 at higher production numbers....and CNQ's Horizon and SU's Fort Hills projects increasing output by year end 2017 too. There is no lack of global oil supply.


----------



## Fraser19

Pengrowth update.

Sold a 4% royalty interest on Lindberg for 250m
Yesterday announced sale of some swan hills production for 180m
Expected production 47-49k BPD

Debt will fall to 970m once funds from sales are received.

Seymour Schulich, owns 110 million shares.


----------



## Fraser19

Looks like someone has been buying shares like crazy.
5 day return 48.68%, however the YTD return is -41.45%.
I may get my money back on this one.


----------



## jargey3000

Fraser19 said:


> Looks like someone has been buying shares like crazy.
> 5 day return 48.68%, however the YTD return is -41.45%.
> I may get my money back on this one.


Opportunity to jump in & make a quick buck on this one???


----------



## AltaRed

jargey3000 said:


> Opportunity to jump in & make a quick buck on this one???


Or lose your shirt. If/when oil falls back to <$45, what do you do then?


----------



## jargey3000

+24% today over Friday. That's what I call a quick buck?
I think ah'ma' git me some shares...


----------



## OnlyMyOpinion

jargey3000 said:


> +24% today over Friday. That's what I call a quick buck?
> I think ah'ma' git me some shares...


Let us in on your secret. How do can you git them at Friday's price? :sneakiness:


----------



## Beaver101

^^ I bet from that 'solid investment friend' of his that works at the estate trust division .... :surprise: 
Did you go all in?

Btw, what's "ah'ma'" ... is that a newfie sing-a-thing?


----------



## jargey3000

Beaver101 said:


> ^^
> 
> Btw, what's "ah'ma'" ... is that a newfie sing-a-thing?


----------



## Fraser19

Yeah, I am not sure what is going on with this stock. It makes no sense.
One of the things that comes to mind that could play a part, is the clock is running out for them to keep there listing on the NYSE. The stock had been trading below a dollar for a long time and I think in November if they do not have an average 30 days closing price of 1.00 USD they will get delisted. If the share price stays above that then some shorts will back off.

Other than that, who knows. It is a company that can't produce a profit, management does not really provide investors with anything related to plans for the future. There many goal is to build out Lindberg stage two, at a price of 600m which they can't afford. Even though they have done a good job reducing debt, the debt to cash flow ratio is worse than ever.
I would not recommend this stock to anyone, but if you play it, set your stoploss.


----------



## Beaver101

:bee:


----------



## Earl

I hate this stock. I bought a few hundred shares back in 2011 when it was $10 and everyone was saying what a good stable stock it was. Then I kept buying more as it fell. Now I own over a thousand shares. Should I cut my losses and sell it all? Keep it and hope it climbs?


----------



## Mechanic

Earl said:


> I hate this stock. I bought a few hundred shares back in 2011 when it was $10 and everyone was saying what a good stable stock it was. Then I kept buying more as it fell. Now I own over a thousand shares. Should I cut my losses and sell it all? Keep it and hope it climbs?


In the same boat. Have about 5000 shares with average cost just under $5. Keeping it on the books but will sell it at some point to offset a gain.


----------



## humble_pie

Mechanic said:


> In the same boat. Have about 5000 shares with average cost just under $5. Keeping it on the books but will sell it at some point to offset a gain.



there might be a correlation here.

long loser pengrowth + short justin trudeau

hmmmmn do they go long donald trump as well?


----------



## Mechanic




----------



## Fraser19

Now that all the dust has settled, Seymour Schulich was the one who was responsible for the price movement. As he bought another 5% of the company.

Overall, it is an interesting situation, however there was a news release today stating that he intends to buy another 5% of the company every six months. As that is the most frequent he can without making an offer for the entire company.


----------



## Earl

This stock was over $13 in 2011 and now it's 5 cents.


----------



## AltaRed

All these stocks with southeast trends could continue to slide. Investing 101 for commodity stocks: don't average down and don't catch falling knives.


----------



## fireseeker

Earl said:


> This stock was over $13 in 2011 and now it's 5 cents.


And that's with the takeover "premium"!

Pengrowth Energy to be bought by Cona Resources


----------



## Earl

The market giveth, and the market taketh. And this time the market tooketh (my money).


----------



## doctrine

This company used to pay a 7 cent a month dividend and sold the entire thing for 5 cents, a negative 75% premium to its share price.

The cash flow used to be $2 a share. One thing I've learned is that cash flow per share is a reverse indicator for these oil production companies. High cash flow per share means the company is in trouble, not that it can sustain the dividend. Counter-intuitive but you can pretty much draw a straight correlation line between high cash flow per share and negative performance and destruction of share value over the last decade. Because investors are correctly pricing in the risk that the underlying business is collapsing and future cash flow will be unable to cover high capital costs and debt payments. Some of these companies have annual cash flow per share equal to the share price....right before filing for credit protection.


----------



## yyz

Well if it makes you feel any better about losing some money
https://business.financialpost.com/...in-on-pengrowth-it-may-have-cost-him-big-time


----------



## OptsyEagle

yyz said:


> Well if it makes you feel any better about losing some money
> https://business.financialpost.com/...in-on-pengrowth-it-may-have-cost-him-big-time


Reminds me of an investment concept that Peter Lynch was known to explain. If you invest $10,000 into a company at $10 per share and I invest $10,000 into the same company at $1 per share, when the stock goes to zero we both lose exactly the same amount of money.

I am guessing Schulich has now learned that lesson. It would have been a little cheaper just to buy Peter Lynch's book for $10 but at least he finally learned it, all the same.


----------



## Earl

What lesson? Schulich is still a genius who has made millions in the stock market. The fact that he was wrong on this one bet doesn't change that.


----------



## yyz

So considering what this sold for and what he was paying when buying shares, it surprises me he didn't buy it out.


----------



## AltaRed

yyz said:


> So considering what this sold for and what he was paying when buying shares, it surprises me he didn't buy it out.


Easy..... Views of increasing oil and gas price forecasts are not materializing as Schulich expected back in 2017 and once burned....... 

1) There are pundits out there, Josef Schachter for one, who have crazy views of where oil prices might be in late 2020 and beyond. Something like $70 in late 2020 and eventually $100 or so some time thereafter. The guy is absolutely nuts. $70 maybe, though not in 2020, but anything beyond that is fairy dust. There is simply too much supply availability at those prices AND global demand growth is simply not as robust any more.

2) Schulich probably expected some pipeline takeaway capacity increases by the end of 2019 or early 2020 when viewed from his 2017 lens. The best we can hope for is end 2020 for Line 3 replacement and that is iffy... could be late 2021 with another delay in Minnesota.


----------



## Mechanic

Waiting for the class action to start. 5c a share, lol


----------



## OptsyEagle

Anyone that has a view on where oil prices will be in 2020 needs to learn a lesson.


----------



## AltaRed

Mechanic said:


> Waiting for the class action to start. 5c a share, lol


Did you look at their 3Q financials? I spent all of 6 minutes to see (assuming I didn't overlook something in my haste) that there is essentially no equity. The only reason for positive cash flow of $4.4M was a withdrawal of $5.9M from the remediation* trust fund. On the Balance Sheet, there was $1.079B of liabilities against assets of $1.106B (without any shareholder equity) and assuming PP&E was fairly market valued at $898M. ISTM this shows the stock was already worthless (or should have been worthless).

* Whether this is okay because of a regulatory surplus in such fund, or maybe more ominously, depleting below regulatory requirements. Maybe there was work behind the scenes of AER telling Pengrowth to sell themselves before AER put them into insolvency to protect sufficient assets to abandon wells and facilities properly without potential burdening the Orphan Well fund.


----------



## Mechanic

AltaRed said:


> Did you look at their 3Q financials? I spent all of 6 minutes to see (assuming I didn't overlook something in my haste) that there is essentially no equity. The only reason for positive cash flow of $4.4M was a withdrawal of $5.9M from the remediation* trust fund. On the Balance Sheet, there was $1.079B of liabilities against assets of $1.106B (without any shareholder equity) and assuming PP&E was fairly market valued at $898M. ISTM this shows the stock was already worthless (or should have been worthless).
> 
> * Whether this is okay because of a regulatory surplus in such fund, or maybe more ominously, depleting below regulatory requirements. Maybe there was work behind the scenes of AER telling Pengrowth to sell themselves before AER put them into insolvency to protect sufficient assets to abandon wells and facilities properly without potential burdening the Orphan Well fund.


I must admit, I didn't. Not very smart on my part that I have held onto this for so long. Should have dumped it when it was $1. $25k lesson.


----------

