CA - Headwater Exploration: Slower Growth But More Profits Ahead

2024-03-27 09:46:12 ET

Summary

• Headwater Exploration Inc. grew production profitably in excess of 40%.
• Management is concerned about the cash balance and debt-free balance sheet, leading to conservative guidance.
• The budget may be affected by changes in heavy oil discount.
• The rapid growth of 2023 led to a higher production maintenance budget in 2024.
• Lower projected oil prices will lead to less growth in the budget. The current oil price rally may change that if it persists long enough.

Headwater Exploration Inc. ( OTCPK:CDDRF ) just wrapped up a banner year. The exit rate of the fourth quarter is not that far away from the rate that the new fiscal year is supposed to average. However, management appears very concerned about the cash balance and the debt-free balance sheet. Since commodity prices are lower, it is probably better to go with conservative guidance rather than something that needs to be cut later....

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