Palliser, PXL.v C$.57
Posted: Friday Dec 20 10:15:45AM 2013
-.01 to C$.27 Ouch! Good thing I sold awhile ago. Operations update yesterday was more bad news. Production down from Q3, not up and more water breakthru's. Pumping more fluids but oil production is struggling to maintain previous levels, in spite of Q4 drilling activities.
Based on their $2million cashflow projection for Q4, they will have cashflow of .03, about 1/2 of last qtr. PXL.v was one of my picks due to cheapness after Q3 but still need growth in production due to price volatility of heavy crude. Was thinking of buying in the .30's but will be avoiding PXL.v until they can get back to growing production and providing data that shipping by rail is helping their netbacks.
CALGARY, Dec. 18, 2013 /CNW/ - Palliser Oil & Gas Corporation ("Palliser" or the "Company") (TSX VENTURE: PXL) would like to provide an operations update.
Fourth quarter 2013 average production is anticipated to be approximately 2,000 boe per day, down 14% from volumes reported in the prior quarter. For 2013, average production is now forecasted at approximately 2,330 boe per day, representing a 4% downward revision from the previous forecast.
Palliser previously provided operational updates which noted that water breakthrough has been experienced in a number of CHOPS wells in the Manitou area and that production declines have outpaced additions from the capital spending program. The new Manitou salt water disposal facility was commissioned in late November, with high volume lift ramp up of these wells commencing in December. It is forecasted that the recovery of oil production from the affected wells at Manitou will be realized through the first quarter of 2014. In the Edam area, the Company has experienced higher water cuts in a select number of high oil rate producers which have recovered a significant percentage of the original oil in place, resulting in production losses of approximately 200 barrels per day as compared to the third quarter of 2013. The Company has reacted to this development by expanding its salt water disposal take away capacity and producing those specific wells at higher total fluid rates. More recently, the Company re-completed new uphole zones in two wells. These recent operations are forecasted to result in production recoveries through the first quarter of 2014.
Due to these lower production volumes, operating costs for the fourth quarter are forecasted to be higher on a per unit basis. When combined with the realized wider heavy oil differentials, the Company is now forecasting funds flow from operating activities of approximately $2 million for the fourth quarter of 2013. Capital expenditures for the fourth quarter are estimated to be $6 million, resulting in forecast year-end net debt of approximately $46 million.
The fourth quarter capital program is now complete; however, winter weather caused some delays in bringing the remaining 2013 projects on production. Results from the Company's total 2013 capital program appear to be in line with previous years, with 18 wells being drilled, reactivated and re-entered for production with 100% success. Production from these projects is forecasted to contribute to corporate production growth during the first quarter of 2014.
The Company anticipates providing an operations update in conjunction with releasing its 2014 capital budget on or before January 31, 2014.
For further information regarding Palliser Oil & Gas Corporation, the reader is invited to visit the Company's website at www.palliserogc.com.
Palliser is a Calgary-based emerging junior oil and gas company currently focused on high netback heavy oil production in the greater Lloydminster area of both Alberta and Saskatchewan.
Posted: Friday Nov 15 9:38:08AM 2013
PXL -.08 to C$.44. Big drop due to Q3 earnings report.
lost .02 and had .06 in cashflow for Q3. Company had warned us that extended weather issues had delayed Q3 drilling activities until late in the qtr, resulting in a drop in production. But they are back on track now and should exit around 2700bpd from the 2350 avg for Q3. In addition to increased production, they increased their facilities to allow 75% of production to be shipped by rail, gaining several dollars per barrel in topline revs.
Even with this "bad" qtr, PXL is very cheap. .06X4=.24 vs .44 share price or less than 2X fwd cashflow.
Expect a good Q4.
Posted: Wednesday Oct 23 10:05:36AM 2013
Palliser is a heavy oil driller in the Lloydminster area. They have significant acreage in the area and a multi year inventory of drill sites. They drill cheap, shallow wells with high success rates. Current production around 2700boepd with 98% oil. They suffered along with all the Canadian heavy oil producers when pipeline capacity and refinery capacity resulted in huge discounts for Canadian heavy oil. Palliser is working around the problem by using rail shipments to the Gulf Coast refiners. They get about $6/boe advantage, even after paying for the higher rail charges.
In addition, Palliser has hedged over 1/2 production at high current rates to ensure they have stable revs for 2013-4.
In Q2, Palliser had cashflow of C$.10 so fwd price to cashflow is 1.4. Extremely cheap and cashflow should continue to improve as PXL has recently completed a cleaning facility that will allow 75% of production to be shipped by rail.
The trading volume is light on PXL so that is a negative. I have started a small position and will likely not load up too much due to the volume. Market could discover Palliser at some point and volume could improve. We'll see.
Netbacks are good at C$30.