PENGROWTH OIL -A pig in a python
Pengrowth Oil and Gas had an important year for it's overall growth.It made a very big acquisition (of N.A.L. Oil and GaS).The acquisition cost them $1.7 billion and added 109 trillion barrels of oil equivalent in reserves and increased production of 27,000 barrels of oil equivalent per day.Pengrowth inherited $385 million in short term debt and replaced it with cheaper long term debt.Capital expenditures were down from $608 million to$467 million.
However the fourth quarter was quite a bit better than the third quarter.The next quarter should be even better.After all revenues for the full year increased by only 2%.This is because of the W.T.I.price differential (which seems to be narrowing slightly) and the price of natueral gas.NAL Energy had a lot of natural gas property.But the fourth quarter had funds flow of $190 million which was up 35% from the third quarter and 11% from the fourth quarter of 2011.Pengrowth has now replaced the $385 million of short term debt with cheaper debt and plans to make additional dispositions of $700 million in 2013.This will be $300 million for developing their Lindberg (heavy oil) project and $400 million to further reduce debt.Has Pengrowth completely turned the quarter or is the pig still in the python?Either way the python is stronger than it was in 2012.
However the fourth quarter was quite a bit better than the third quarter.The next quarter should be even better.After all revenues for the full year increased by only 2%.This is because of the W.T.I.price differential (which seems to be narrowing slightly) and the price of natueral gas.NAL Energy had a lot of natural gas property.But the fourth quarter had funds flow of $190 million which was up 35% from the third quarter and 11% from the fourth quarter of 2011.Pengrowth has now replaced the $385 million of short term debt with cheaper debt and plans to make additional dispositions of $700 million in 2013.This will be $300 million for developing their Lindberg (heavy oil) project and $400 million to further reduce debt.Has Pengrowth completely turned the quarter or is the pig still in the python?Either way the python is stronger than it was in 2012.
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