Yes good point. I think I hit the nail on the head in my previous recent posts on CE1. I was a big believer in the company and its assets and had a buy rating on it at that time as well. However my view changed (and I posted my revised view on HC on the day it changed) when I saw the latest set of qtr results which revealed what I thought were terrible decline rates on their newer wells. I couldn't back calculate any of their guidance estimates and budget forecasts and come up with an explanation other than decline rates being approx double what I previously thought they were. When you adjust for this the current market cap makes sense, so too the heavy capex requirement to maintain existing production.
The oil price should be too much weight on it, look at other ASX peers. The WCS diff would be a problem however, as tracked by TXOE. The point about Montney I doubt as well. The bounce from announcing monetising it was minimal. I don't think it's captured much in the market cap - the market hates binary outcomes and with current balance sheet strength (lack thereof) Montney remains a binary outcome. It's either worth a lot or nothing right now.
If suddenly SPR draw stops, WTI goes back to $100 and WCS diff falls to $13 - then sure I expect a drift 20c, but not more than that given some new clues around the quality of assets. It would take Montney to go beyond that.
Just my opinions.
CE1 Price at posting:
13.5¢ Sentiment: None Disclosure: Not Held
(20min delay)