PBG.to
maybe I am just being simplistic and certainly I am not following any industry standards for valuations but the way I look at it is THAI is dead and worth nothing (actually less than nothing since it is a continual draw on capital while they keep trying to make it work).
If PBN dividend had to be eliminated (I don't think this is going to happen though), PBG would have no way to fund it's Thai efforts outside of selling off assets or raising additional debt or by issuing shares to raise capital.
But they are carrying 1.7 billion in long term debt. How much of the heavy oil assets would they have to sell in order to be able to afford to develop the remaining heavy oil assets? will they be able to borrow the money needed to develop SAGD to pull the heavy oil out of the ground when they are already carrying this much debt? Will someone buy new shares in this company and how much very significant dilution would this be?
They made a huge bet on THAI and it has failed. Now they are dependent on PBN dividends to fund their debt laden future. Without the PBN dividend, they are potentially dead in the water. How much would a company with no earnings power be able to get for a fire sale of their assets?
Obviously they have some value but the market seems to think it is a lot less now than 6 months or a year ago. I certainly don't intend to own any PBG waiting for the market to tell me what that remaining value is.
again, that's just my opinion.
JFF7
It's better to be out wishing you were in than in wishing you were out.
"Markets can remain irrational longer than you can remain solvent". - John Maynard Keynes
