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TNEYF - Obsidian Energy: Too Expensive For The Risks
Tamarack Valley Energy Ltd
With the depressed Canadian oil prices during Q4, Obsidian Energy (OBE) reported negative funds flow from operations. The worsening net debt ratios lead to amending the covenants of the senior notes at the beginning of this year.
With this context, management's goal is to sustain the production without increasing the net debt. The recent improving Canadian oil prices provide some oxygen. But the company is still vulnerable to a prolonged low oil prices scenario.
Considering the risks, the market doesn't value the company at a bargain price compared with some other producers.