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Remembered your posting about others success based on the development of "former" GTE assets... when I ran across this linktoday...
GTE has been pretty frustrating for a while... as is true of all the oil companies, and particularly the juniors, through the events of 2020. The frustration was ameliorated for a time by knowing "they got this" and being able to buy shares for $0.17-$0.20 (twice) in 2020... but, even that "win" in buying shares on sale... is just not the same as the benefit (and feeling) of having them succeeding by delivering wins in exploration and development... And, that effort has been "in the works" but "on hold"... for over two years now... up until now.
Back before the world and many of the investors in it went insane... the primary attraction in GTE was that they were always both very solid as managers and producers, succeeding wildly in maintaining a very low cost profile... while also proven serially successful in leveraging "what they had" into "more" in the next cycle... as they're also about as good as it gets in knowing their ground... and they have been very good both in delivering a very high rate of exploration successes... and in timing the cycles to optimize returns in the "next" bull market in resources.
That's what was ongoing as the events of 2020 approached... They'd identified new resources... and had generated a new strategy to both expand "what they had that they knew well"... while diversifying geopolitically across borders into Ecuador... while still expanding into a continuation of a geological trend they well understand... that allows keeping costs lower than usual in green fields exploration. Shedding perfectly viable assets in Peru... made sense in relation to the scope of the larger potential in the additions they'd identified and focused on acquiring. So, they acquired them... while, as always before, taking on debt to enable the expansion, well timed for the cycle, fully expecting to pay the debt down rapidly with future production enabled.
Then, 2020 happened... so, throttle everything back... go into survival mode... take the hit to the bottom line... and wait for the inevitable rebound on emergence to resume prosecuting the plan. All that's done now... and IMO they've done an amazing job of delivering more than "survival" or "just muddling through"... but have increased production while "marching in place" on both the pace of development and in having put the majority of exploration effort on the back burner. They still added to reserves in 2021... with a 148% replacement ratio in PDP reserves (+14.3 million barrels), or 123% in 1P (+11.9 million barrels). They've reported 2021 results... way above analyst expectations... with the full year coming in at + $012... way above analyst expectations at $0.04... and did that with oil averaging ~$60 in H1, and ~$70 in H2. Based on that last annual report and ~$65-$70 oil, Yahoo says the PE is 12.58, the forward P/E is 5.02... and the PEG is 0.23. And, that's NOT considering either the current price of oil... OR the fact that they're now able to resume both development... AND exploration... while fully funding them from cash flow.
And, while resuming the internal funding of development and growth... they ALSO say they'll eliminate the revolving credit facility... all the higher risk short term debt...before the end of the second quarter. That should eliminate around $65 million in 2020 debt... still only about 10% of the total debt load. The debt was obviously more of an issue in the risk profile with oil at $20 to $40. But, with oil at $115... and the new assets now re-valued for a lot more than was paid for them... not so much a liability as an "win" in having gained the value in the assets paid for... when they were "on sale" relative to current markets.
So, with the oil markets trending up... that things are looking up now... isn't surprising. But, I think, the "rest of the story" in 2022... will be about putting 2020-2021 behind them... and resuming on plan in development and, particularly, FINALLY advancing key efforts in the exploration of the new potentials. With GTE already performing again financially at 2018 levels... all the forecasts... even those very few that account for rising oil prices... still assume ZERO new value in contributions from quality performance in efforts in development... or from "finding" new oil... and history suggests ZERO is probably the wrong number to apply there.
Investors often tend to be a pessimistic lot... perversely, far more so in the wake of having realized and already survived some extraordinary risk. That tendency also works to blind them to the potential that... the news flow in the future might not always be all that bad... although, for commodities investors... whiole not wishing it... the right kind of bad can be very, very good.
GTE... has an added advantage there... of NOT sharing in the geopolitical risks tied to having a thoroughly corrupt Biden trying to shut them down ?
That's also one of the core reasons I've focused on it over the years... as the U.S. is decidedly one of the most hostile and WORST global jurisdictions for geopolitical risks tied to the oil industry...
It's not that the U.S. is truly oil averse... its only that Team Biden want to ensure he buys all his oil from Iran and Venezuela... and none from Russia or Republicans... !!!
