Excellent article. Dr. Blair makes kalkulations based on his knowledge of finance and figures not just guesses based on other people's comments on Twitter. Always be more careful than optimistic.
The NPV of 35 years of $270 million of annual cash flow at a 9% discount rate is $2.8 billion or about $9 per MEG share. At an $80 oil price, your "doesn't matter what happens" conclusion suggests that without higher commodity prices (which do matter) MEG shares are worth CDN$9. Less, if you adust for cost inflation and ARO at the end of the 35 years. I am a buy and hold investor but would not buy and hold MEG shares at CDN$24 a share without a convincing case that oil prices were more likely to rise than fall or remain at current levels and that suggests prices do matter not just in the current year but in all future years for the next 3.5 decades.
Which facts? I have read the MEG reports and incorporated them into my models. MEG is worth CDN$9 if Access Western Blend remains at the price modeled. It won't but paying in the mid-$20's for the stock seems like a bad bet. I cover shorts since they are costly to maintain and you can be called to cover without notice, so when they meet my return objective I take the money and run. Shorts are never long term investments for me, but often hedges against a long position for a particularly event driven period. Why don't you manage your investments and I will manage mine. I don't need (and certainly don't want) advice and while I publish articles on valuation I neither recommend for nor advise against any investment for any reader.
If you see facts that are wrong, I am open to being corrected and thankful for that input. I don't see any in the article that appear wrong.
Excellent article. Dr. Blair makes kalkulations based on his knowledge of finance and figures not just guesses based on other people's comments on Twitter. Always be more careful than optimistic.
The NPV of 35 years of $270 million of annual cash flow at a 9% discount rate is $2.8 billion or about $9 per MEG share. At an $80 oil price, your "doesn't matter what happens" conclusion suggests that without higher commodity prices (which do matter) MEG shares are worth CDN$9. Less, if you adust for cost inflation and ARO at the end of the 35 years. I am a buy and hold investor but would not buy and hold MEG shares at CDN$24 a share without a convincing case that oil prices were more likely to rise than fall or remain at current levels and that suggests prices do matter not just in the current year but in all future years for the next 3.5 decades.
Which facts? I have read the MEG reports and incorporated them into my models. MEG is worth CDN$9 if Access Western Blend remains at the price modeled. It won't but paying in the mid-$20's for the stock seems like a bad bet. I cover shorts since they are costly to maintain and you can be called to cover without notice, so when they meet my return objective I take the money and run. Shorts are never long term investments for me, but often hedges against a long position for a particularly event driven period. Why don't you manage your investments and I will manage mine. I don't need (and certainly don't want) advice and while I publish articles on valuation I neither recommend for nor advise against any investment for any reader.
If you see facts that are wrong, I am open to being corrected and thankful for that input. I don't see any in the article that appear wrong.