Q: Hello Peter et al.
I am finally starting to see the bounce back in my Ithaca Energy investment. My average cost is now at $1.38 so I am still down on my original investment. As you probably know based on my previous question history I have been invested in this stock for a long period of time. I have been burned by the two delays in the upcoming Stella FPU start-up. The company has been wise with its hedges over the years and I know that this has prevented certain bankruptcy of the company in this oil industry downturn. Some hedges come off in July of this year and the remainder (6600 bbl/d) come off in July 2017. They have reduced their debt over the last year, currently at $670M and have survived their RBL redetermination at the end of Apr/16 with $100M of headroom. The production of Stella is said to add an additional 16K boepd to the production portfolio in late Sep/16. With the oil price now hovering around $50/bbl do you think there is still a huge risk to this stock? There has been a lot of rumours to a Delek take-out since they own about 10% of IAE at $1.05. I worry that they will take it out before Stella or after Stella start-up at a low premium and I will not get my potential return for waiting. It has been up approximately 85% YTD which is nice to see but I am hoping to see a $2.50 to $3.00 price after a full quarter of Stella production. This I would expect in 4Q 2016 results. My other lottery ticket Iona Energy never paid off. It went bankrupt in the end. What is your viewpoint on IAE-T? Seems to have a lot of volume in the UK but very low volume in Canada and I am surprised by this compared to past history. It use to be covered highly in Canada before the delays with Stella and when it was trading in the $2.50-3.00 range. Any possible reason for this in your opinion or is it still in the doghouse by Canadian oil analysts?
Thanks in advance
Brendan
I am finally starting to see the bounce back in my Ithaca Energy investment. My average cost is now at $1.38 so I am still down on my original investment. As you probably know based on my previous question history I have been invested in this stock for a long period of time. I have been burned by the two delays in the upcoming Stella FPU start-up. The company has been wise with its hedges over the years and I know that this has prevented certain bankruptcy of the company in this oil industry downturn. Some hedges come off in July of this year and the remainder (6600 bbl/d) come off in July 2017. They have reduced their debt over the last year, currently at $670M and have survived their RBL redetermination at the end of Apr/16 with $100M of headroom. The production of Stella is said to add an additional 16K boepd to the production portfolio in late Sep/16. With the oil price now hovering around $50/bbl do you think there is still a huge risk to this stock? There has been a lot of rumours to a Delek take-out since they own about 10% of IAE at $1.05. I worry that they will take it out before Stella or after Stella start-up at a low premium and I will not get my potential return for waiting. It has been up approximately 85% YTD which is nice to see but I am hoping to see a $2.50 to $3.00 price after a full quarter of Stella production. This I would expect in 4Q 2016 results. My other lottery ticket Iona Energy never paid off. It went bankrupt in the end. What is your viewpoint on IAE-T? Seems to have a lot of volume in the UK but very low volume in Canada and I am surprised by this compared to past history. It use to be covered highly in Canada before the delays with Stella and when it was trading in the $2.50-3.00 range. Any possible reason for this in your opinion or is it still in the doghouse by Canadian oil analysts?
Thanks in advance
Brendan
