tag:blogger.com,1999:blog-1527840491496268397.post2112222683606098706..comments2024-03-08T11:20:30.095-07:00Comments on Credit Bubble Stocks: PrairieSky Royalty Ltd. Reports Q1 2022 Earnings ($PREKF)Unknownnoreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1527840491496268397.post-82735895230720281102022-05-05T08:34:18.585-07:002022-05-05T08:34:18.585-07:00Personally, I would never invest outside the U.S.,...Personally, I would never invest outside the U.S., Canada, western Europe, and Japan.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-31160910468017999972022-05-05T04:08:49.600-07:002022-05-05T04:08:49.600-07:00Something went wrong with my comment, so I try aga...Something went wrong with my comment, so I try again.<br /><br />True, now I remember how you mentioned the similarties between royalties and Canadian Oil sands - very good insight.<br />As for the diversification: have you looked at LATAM juniors? I have fond intereting things like Geopark Ressources - very good managment presentations and fundamentals.<br />Here is my problem: I am struggling with how much of my net worth to put into this. Since I see (wrongly for sure) very limited downside, I am tempted to go all-in. However, I am hesitating since I do not feel the downside, i.e. I am struggling to imagine how it might look like. I mean, with current deleveraging cash generation, must comps could survive a Covid style global lockdown and remain in good condition. Have you ever seen a better opportunity in that many stocks? Viennacapitalisthttp://viennacapitalist.comnoreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-84248730037073211222022-05-04T02:47:24.943-07:002022-05-04T02:47:24.943-07:00True, I remember now that you mentioned the simila...True, I remember now that you mentioned the similarity to royalty companies. <br />Agree on the diversification part. Have you looked at some LATAM plays for that purpose? You get an EM Discount in additon to the valuation discount and the ESG risk is certainly lower there. Look at Geo Park limited, a position of mine.<br /><br />Now that we have established that these things are dirt cheap, the most important question remains: how much of one's net net worth should one put into these things?<br />Given that I (wrongly) see very limited donwside, I am constantly tempted to go "all-in", but I hesitate since I would like to understand the downside better, but am strugling with the analysis.<br />I it better to diversfy across the spectrum (integrated, up stream, etc) and a larger exposure, or is it better to have somewhat less exposure and take more risky junior upstream pure plays? <br />I am strugling with answers to these questions...Viannacapitalisthttp://viennacapitalist.comnoreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-73036962115723984172022-05-03T09:55:09.000-07:002022-05-03T09:55:09.000-07:00It's a good question.
An "upstream busi...It's a good question. <br /><br />An "upstream business with minimal growth capex [versus] a pure royalty play" - this is why I have said that the oil sands are "royalty like":<br /><br /><i>Oil sands are almost royalty-like, in the sense that (a) the capital costs are front loaded, unlike drilling wells, so they should benefit more from inflation than an E&P and (b) they have decades of sands to mine, so you avoid the forced reinvestment at inopportune times.</i><br />http://www.creditbubblestocks.com/2022/02/goehring-rozencwajg-distortions-of.html<br /><br />A royalty is basically a business with zero cost of goods sold. So the higher the gross margin goes, the more royalty-like a business is. A toll bridge is also royalty-like for the same reason.<br /><br />It may be prudent to diversify, though. The oil sands are all in Canada, for one thing. (Of course, so is Prairie Sky.) Owning royalty-type interests in the U.S. reduces the geographical concentration.CPhttps://www.blogger.com/profile/12701174164478027499noreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-37477565166139586692022-05-02T07:31:46.168-07:002022-05-02T07:31:46.168-07:00Thanx for the write up, I might swith my TPL posit...Thanx for the write up, I might swith my TPL position for this one on valuation grounds.<br />This things looks cheap on an absolute return level and is the perfect long term holding.<br />However the following thought crossed my mind:<br />We are used to think of royalty companies as superior (in terms of risk) relative to upstream producers. <br />However, is this still true when you look at the oil sands and assume disciplined managment and no need for growth capex, given the long reserve life? <br />What's the difference in risk between an upstream business with minimal growth capex and a pure royalty play? Probalby not much (or I am overlooking something)<br />Example<br />The FCF YIELD of PREKF @ 75 USD oil is around 9 percent p.a. according to managment<br />There are junior Canandian oil sand producers that (IPO.to, OBE.to) that have FCF Yields north of 20 percent at WTI 75.<br />This is a much higher reward for what it seems not much higher risk (provided managements stay disciplined)<br />Is there really that much more risk in the later, or are they still the better viennacapitalisthttp://viennacapitalist.comnoreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-46999945723592527362022-04-30T18:37:23.813-07:002022-04-30T18:37:23.813-07:00Harshit Gupta
Good morning, everyone. Congrats on ...Harshit Gupta<br /><i>Good morning, everyone. Congrats on another strong quarter. I just wanted to first ask about the hedging strategy. Do you guys still want to go and hedge looking at the commodity prices where they are? Or you are looking at some strategy over there to hedge some of the production in the coming quarters?</i><br /><br />Andrew Phillips<br /><i>Yes. Thanks for the question, Harshit. I think the -- we're very consistent with hedging. We've never hedged since our IPO and we're not protecting capital programs because there are 0 and our debt is coming down at a very quick pace. And <b>ultimately, we view it as speculating with investors' capital. And I think longer term, we are one of the few companies that give pure exposure to unhedged, unlevered oil and gas in Western Canada with no operational leverage. So we'll plan to keep it that way.</b></i>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1527840491496268397.post-8945813155097909592022-04-30T18:35:50.660-07:002022-04-30T18:35:50.660-07:00Q1 conference call:
Combined with an almost doubl...Q1 conference call:<br /><br /><i><b>Combined with an almost double-digit free cash flow yield in some of the strongest growth rates in the industry, PrairieSky provides a strong total return proposition at a very low risk.</b><br /><br />Two new major oil discoveries were announced subsequent to quarter end on our undeveloped Clearwater acreage. These include Utikuma Lake and McLeod Lake. This further highlights the <b>optionality associated with large undeveloped land basis that is a differentiating factor when owning PrairieSky shares</b>.<br /><br />In 2022, we will have exploration wells drilled for both helium and lithium carbonate, both opportunities are on PrairieSky fee title lands. Our large-scale CCUS project in Meadowbrook received initial approval from the Alberta government and we look forward to continuing to advance this opportunity with our project partners.</i><br /><br />https://seekingalpha.com/article/4502202-prairiesky-royalty-ltd-prekf-ceo-andrew-phillips-on-q1-2022-earnings-call-transcriptAnonymousnoreply@blogger.com