After the unexpected outage at Syncrude, PGH managed to pop out of a 10-year trendline (yes 10 years!) with solid daily volume. The stock had a nice bounce after it reached $0.45 (not a typo) and rose up to $2.08 before pulling back in a nice channel, bouncing and consolidating at primary fibonacci retracements along the way. The bounce today came off of the 61.8% retracement.
You'll also notice PGH was highly correlated with the change in WTI crude oil prices, however that correlation started to deteriorate back in May of 2015. Obviously a drop in oil prices will have a larger impact on an oil exploration & production company, but PGH's drop is also due to the large amount of debt (and subsequently debt service) the company has historically held. However, management has held true to their promise to reduce the Company's debt in 2017, and has already paid off $300 million as of 4/10/2017 through the sale of various assets and royalties, reducing their debt by 31% from 12/31/16. With the debt service burden partially alleviated, and a little help from oil prices, PGH is undervalued and a buy both short-term and long-term.
You'll also notice PGH was highly correlated with the change in WTI crude oil prices, however that correlation started to deteriorate back in May of 2015. Obviously a drop in oil prices will have a larger impact on an oil exploration & production company, but PGH's drop is also due to the large amount of debt (and subsequently debt service) the company has historically held. However, management has held true to their promise to reduce the Company's debt in 2017, and has already paid off $300 million as of 4/10/2017 through the sale of various assets and royalties, reducing their debt by 31% from 12/31/16. With the debt service burden partially alleviated, and a little help from oil prices, PGH is undervalued and a buy both short-term and long-term.
