SRMLF - Beware Of Storm Resources' Competitive Disadvantage
Thanks to its strong hedges and reasonable debt load, Storm Resources (SRMLF) should not face financial difficulties over the next couple of quarters despite the challenging oil and gas environment.
Yet, investors should remain cautious: Because of its smaller scale, the Canadian oil and gas producer operates at higher costs compared to its peers. Since hedge will eventually expire, and given the structure of its debt, the company's higher operating costs will become an issue if commodity prices don't improve in the medium term.
Source: Storm Resources
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