PGHEF - Pengrowth Energy: Addressing The Debt Wall Is Crucial To Success
The bitumen producer Pengrowth Energy (OTCQX:PGHEF) reported strong Q2 results. With higher realized prices and lower costs, total netback exceeded C$7/boe, even after unfavorable hedges.
Assuming annualized H1 results, the market capitalization corresponds to an attractive free cash flow yield. But refinancing the debt is becoming urgent. Though, management didn't communicate any outcome yet from its strategic review.
Besides much higher oil prices over the very short term, I don't see any positive outcome for shareholders. Thus, despite the apparent attractive valuation, the situation is risky.
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