# Penn West



## daddybigbucks (Jan 30, 2011)

Anyone looking at getting into Penn West?
Down to $8.50 with 6% yield that seems to be safe.
Its on the TSX60 and seems to be a solid company with less than stellar management.
I was thinking about dipping my feet in.


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## Canadian (Sep 19, 2013)

I would be cautious about this stock. They plan on reducing debt by selling $2B in assets over the next 2 years. That's a 14% reduction in asset NBV, and who knows what kind of losses will be realized once they are sold. Also, by selling these assets and concentrating their operational focus, they're losing revenue streams and there will be more pressure for them to expand their light-oil production. Their current EPS doesn't cover the reduced dividend and they have no cash, so they are draining their equity. I'm thinking it would have been wise to have a larger dividend cut until their operations turn around. I think I'd like to see an increase in cash flow and revenue before I'd consider buying shares.


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## daddybigbucks (Jan 30, 2011)

Good points.
I did wonder why they had no cash on the balance sheet. They must be just financing everything.

I also agree the dividend cut should have been deeper.

I see a slight turnaround in the balance sheet so I'm going out on a limb with this one.
Risk vs reward at this point is acceptable to me.


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## fatcat (Nov 11, 2009)

they are buyout target since they have very large land holdings i believe


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## Canadian (Sep 19, 2013)

At this point I'm not sure companies would seriously consider buying them out. I doubt purchasing companies want to bear the cost and burden of restructuring the operations in its current state. If things start to stabilize or improve after selling off some of those assets and focusing production, then I could see a larger light oil player buying them out.

I'm also not sure yet what assets will be sold. I wonder if any of the land holdings will be in the mix. It will be interesting to see the PP&E note in the next few sets of financial statements.


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## Fraser19 (Aug 23, 2013)

Dividend cut from .14c to .03. A massive but much needed cut.
Budget reduced by 215 million.
One thing that I really like is that they based the price of oil at $65.

Seems a little late, I feel Penn West needed this long before the drop in oil. 

On the stock house people say they are buying this like crazy in hopes of a buy out. Although it is interesting to watch, I have enough companies that are high risk as it stands.


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