Edge Res Share Discussion Threads

[carpadium] 07/12/2015 21:40

Cheers Jamesie, atvb.

[jamesiebabie] 07/12/2015 21:28

Carp -

Thanks for your good wishes; it's all about management from hereon in for my wife and son, maybe a few adaptations as we go long; it'll keep me busy with the DIY and planning.

I think EDG will struggle through; but it may take a while.

I said when I exited LGO is was due to long term curves and all the evidence suggested they would decline quickly. I had evidence from four different fields to suggest they would not be good; I also stated TXP's wells were also very good for 30 day IP's.

I feel sorry for many folk who got drawn into the story including you.

Have a look at SPL and AERO; interesting shares and totally different.

[carpadium] 07/12/2015 20:45

So sorry to hear that Jamesie, to your wife and son every good wish for their health and future.

The market must be very secondary but glad you're doing OK somewhere. I'm not! ... but really should have heeded internal warning bells re LGO ...I didn't, a lesson learned probably too late in life to recover from. All now hangs on EDG for me.

[jamesiebabie] 07/12/2015 20:15

Carp - things on the home front are far from ideal and will be a life long issue, unfortunately for my wife and it appears my son may also have got an hereditary condition which doesn't appear until later life. Life must go on and you play with the cards you have been dealt with.

I'm positive about silver and gold and I think oil may also get pulled along, although the inventories don't help. There maybe another leg down for oil, but that should be the bottom, but it could last another 6 months, unless we have WW III which is a real possibility.

TBH - I'm doing ok elsewhere which is good and takes away some of the pain from my oil stocks.

[carpadium] 07/12/2015 19:53

What are you hoping for Jb in terms of good news for oil?

And talking of good news hope things on the home front steadily improving for you.

[carpadium] 07/12/2015 19:44

It would Laz had we not taken out a hedge on $240K - $280K USD/Month @ S1.25CDN/USD from 10/15 to 04/17. It explains our ongoing derivative loss, in this case safety play has and is proving expensive.

[lazarus2010] 07/12/2015 17:30

US/C$ 1.35...every little helps!

[carpadium] 06/12/2015 17:36

OPEC's decision to continue their current strategy will sound the death knell for desperate companies large and small, finally killing off any hope they had for turnaround and survival.

This then could be the tipping point at which any deal is preferable to no deal so I would expect BN to finalise and announce within the next few weeks. We know he's been talking to more than one party over the last few months.

Whatever comes our way BN's acquisition guidelines state:
i. Exceptional ROCE through positive cash-flowing assets
ii.Payback on all capital in <1 year.

Bring it on and, to some extent, rescue the year Brad.

[carpadium] 02/12/2015 16:47

Reproduction of a post by Laz on EME thread, with thanks. Canada, as is well known, has borne the brunt of damage through oversupplies/low prices giving rise to Brad's ambition to build a group of profitable assets whilst conditions allow.
Maybe far longer in time frame than some shareholders envisaged but in 2?, 3? 4? years EDG could be a valuable bolt-on for a bigger operator and finally deliver in a big way for the patient holder.

The world's oil companies have cancelled or delayed final investment decisions on ~150 projects that could wipe out 19M bbl/day from the world’s hydrocarbons and stay underground for several years longer than expected amid lower crude oil prices, according to a new report from Tudor Pickering Holt.
Canada and Norway top the investment bank’s list of deferred projects by country, while surprisingly few deepwater projects have been deferred in the Gulf of Mexico and Brazil.
The biggest oil companies account for a third of the 150 projects Tudor Pickering says have been delayed or cancelled, a scale that “suggests that companies will have real growth issues toward the end of the decade,” and some will have to buy smaller rivals to make up for it.

[carpadium] 02/12/2015 16:15

For those not accessing SEDAR report, below taken from MD&A just released ...

OUTLOOK
Edge has remained true to its strategy of operating in a conventional, shallow arena with properties that offer exceptionally large economic returns at lower than average risk, regardless of the commodity type. With much industry attention now focused on lower and decreasing oil prices, our dedication to an excellent strategy and the assembly of exceptionally high quality assets will allow Edge to excel during a an industry downturn. Within the context of a tumultuous industry dynamic, Edge has acted very conservatively with respect to capital expenditures and cost management, and will continue to do so while commodity prices remain low and/or unstable.
Commodity price swings affect the top line; however, heavy oil producers should consider other important factors, such as managing costs. In the midst of falling WTI oil prices, Edge’s received heavy oil price has had some reprieve, as the “heavy oil discount” to WTI has improved. Additionally, the Canadian dollar has weakened versus the US dollar, resulting in a lower oil pricing impact for Canadian producers. Both of these factors have lessened the impact of falling light oil prices on Canadian heavy oil producers; however, the impacts of low WTI pricing are expected to overshadow profitability in the industry for the next 1-2 years.

The Company is unlikely to employ a large drilling program in the near future, given the low oil price. Efforts will be focused more on the acquisition of additional, complimentary assets and/or corporations. These acquisition opportunities are now starting to improve in quality and quantity.
Now that acquisition opportunities are improving, Edge expects the new capital partner relationship to finally bear fruit in the relatively near future.
The Company has demonstrated a consistent record of highly successful and accretive acquisitions – especially for a junior E&P company in the midst of an illiquid equity market. While the bulk of value has traditionally been created with the drill bit, it is reasonable to expect that opportunities for additional acquisitions will present themselves in the future.

In any endeavor we pursue, whether through the drill bit or via acquisition; oil or gas; vertical or horizontal; deep or shallow, at the core of that pursuit will be maintaining the fundamentals that have brought us success in the past:
1. Growth through focusing on exceptional ‘return on capital employed’ projects (good growth vs. growth for growth’s sake)
2. Fast payback on all capital invested (< 12 months)

[lazarus2010] 01/12/2015 18:32

Adverse, if the company issues shares and buys an asset which is worth more than they pay for it, there is effectively no dilution. Yes the number of shares increases but the total asset value of the company grows pro-rata. Let's say they buy $1mln worth of assets for $500k, the NAV for the company has increased. If the PoO also increases, then the NAV increases further.

If they raise $500k and buy an asset worth $100k then we're in trouble!

[adverse] 01/12/2015 18:03

Lazarus2010 1 Dec'15 - 17:37 - 3531 of 3532

Could be $500k, $5mln, $10mln who knows? Does it matter so long as the assets are cash flow positive and increase the size of the company?

What are you smoking, Lazarus?! Does 300% dilution not bother you at all? The cash flow may become positive and the size of the company grow, but your share of it will be diminishing rapidly! It's all very well saying "prices are rock bottom" for new assets, but EDG's share price is also rock bottom, so any money raised by placing is massively dilutive.

[joan of arc] 01/12/2015 18:00

tf, I'm glad you feel positive. The risk of course is if the POO collapses again. I remain a small holder.

[lazarus2010] 01/12/2015 17:37

Could be $500k, $5mln, $10mln who knows? Does it matter so long as the assets are cash flow positive and increase the size of the company? The current G&A costs will then be spread over more barrels of production, thereby increasing netbacks per bbl. It could be that they pick up a number of assets from small private producers who need to raise capital to prevent them from losing everything to the banks, so we could see several placings over the next few months. Whatever it is I am looking forward to seeing the comapny grow its asset base while prices are rock bottom, then who knows where we could be in 12-18mts time. If WCS were to get back into the $50's we could be a very profitable co.

[adverse] 01/12/2015 15:10

So that means another private placing with the partner? 15 million shares at 3.5 cents would provide another $525,000. Enough?

[lazarus2010] 01/12/2015 13:40

adverse...read the rns!

"...We have been working intently with our new capital partner..."

[adverse] 01/12/2015 13:26

Please can someone explain how EDG can buy assets with no money!

They have net assets of $1.7m. Loss for the latest six-month period was $2.0m. So at the current rate they will be insolvent in six months.

How can they spend money buying assets?

I'm happy to be corrected if this is wrong!

[lazarus2010] 01/12/2015 12:17

Joan, Brad has been responding to those who have written to him. He has confirmed in today's rns that the plan to raise cash via equity is ongoing and that potential assets are coming available...so of course they must be working on something, which as he says they expect to be cash flow positive. It's not exactly a secret! I doubt that any deals will be done before end 2015, but 2-3 months should see something added to the portfolio, and once that succeed in one deal and show the banks their intent, the likelihood is that more banks will be bringing assets and asking brad to take them off their hands!

" Nichol added, "Recent developments on the potential acquisitions front have given us a degree of enthusiasm about the future. We have been working intently with our new capital partner and are very optimistic that we will be in a position to acquire positive-cash-flowing assets at very reasonable prices in the near future."

[joan of arc] 01/12/2015 12:08

topazf, what is a CEO doing writing personally to you to give you market sensitive information?? Pull the other one.

[topazfrenzy] 01/12/2015 09:46

Brad Nichol wrote to me saying he hopes to have a deal done very soon, with an announcement maybe before Christmas. The wording today confirms that those assets on offer finally may be tasty enough to invest in.

This company is very well run but the share price is priced for failure. When oil turns this will turn very fast in my opinion, the comany's ambitions are big and in a few years it could well be a noteworthy, even a dividend paying enterprise.

[lazarus2010] 01/12/2015 09:33

looking at the losses, a lot of these came from derivatives (hedging I presume) and the cost of raising the $500k through a share placing was almost 10%...nice to see the lawyers and banks still make their money!

[telbap] 01/12/2015 09:29

Sadly the market does not agree, another red day, and a big one. Still holding here, but 1.5 is my exit point, try to keep some of my cash intact. Looking over the figs it does appear they have slashed costs and are really trying to keep afloat, but bottom line is the very small margin 1.7 mill that is keeping the ship afloat. They will have to come to the share holders with a rights issue soon, then a share consolidation to try and get some semblance of respectability back in the share price I hope they can come out the other side, but also until poo moves up that will not happen.

[carpadium] 01/12/2015 08:08

Not a bad effort at all considering the market and outlook, they've cut costs like crazy which all shareholders would want to see. Now we must await Edge acquiring 'cash-flowing' assets to boost income, reduce debt and improve credit-worthiness.
An increase in PoO would help too!