Common Stock Warrants

Source: Streetwise Reports 08/31/2019 The company’s revised estimates, the reasons for and repercussions of them are addressed in a CIBC report. In an Aug. 26 research note, analyst Dave Popowich reported that his firm CIBC reduced its price target on Whitecap Resources Inc. (WCP:TSX) to CA$7.25 per share from CA$7.50 due to strip pricing changes. In comparison, the oil and gas company’s current share price is about CA$3.67. CIBC made other small adjustments to its estimates on Whitecap to reflect the company recently reducing its 2019 budget by CA$50 million to CA$400 million. This move, Popowich wrote, reflects “an increasingly cautious industry stance” in a worsening oil price environment. Consequent to lower spending, Whitecap’s Q4/19 production is expected decrease to 74,000–75,000 barrels of oil equivalent per day (74,000–75,000 boe/day) from 77,000–9,000 boe/day. Full-year 2019 production guidance remains the same, however, and Whitecap forecasts free cash flow this year of about CA$135 million, an increase over previous guidance of CA$95 million. “With an estimated FY19 payout ratio of just 82% on recent strip pricing, Whitecap’s 9.3% dividend yield looks very safe for the time being,” Popowich highlighted. CIBC anticipates Whitecap’s lower spending in H2/19 to carry over into 2020. Thus, the bank decreased its full-year 2020 capital spending forecast on the energy firm to CA$450 million from CA$500 million and reduced its projected production by 4% to 74,015 boe/day. Popowich concluded that “Whitecap has maintained a relatively strong balance sheet throughout the ongoing industry downturn, and we see that as a … Continue reading →