RE:RE:RE:RE:RE:RE:RE:news this coming week? lovetheoilpatch wrote:
exactly teevee...the nav was 6$..yet weve aquired way more good land we are producing more than we were when the nav was 6$...nothing has changed except we now produce more per day and own way more land......
yes, but the price of gas was over $6/mcf when the nav was $6. RTK is still highly leveraged to nat gas. I don't expect too much increase on the nav for Montney assets at Inga as they will only have 3 wells, however, the Doig should be worth more, along with Peace River Arch assets. Continued positive Montney results at Inga won't hit the NAV until the 2014 year end report which is a year from now.
RTK's big problem is that it is under capitalized. Hopefully a combination of a great 2013 year end reserve and NAV report, good Montney results, and an increase in the line of credit will finally get RTK out of the dog house with brokers, analysts and institutional investors, and boost confidence in the stock and the share price and allow for future financings at prices that makes sense, however, I doubt RTK will ever be able to raise equity capital at 2 x nav like KEL.
What gives me hope is that if you assume RTK's production is worth the same $/flowing barrel as KEL's production, factor in debt, and share capitalization, on paper, RTK should be worth more/share than KEL.
I believe the biggest risk is that continued good Montney results provide clarity on a development run way which make RTK an attractive target for the likes of TOU or Shell BEFORE value is realized and reflected in the share price. Give the fit between KEL's and RTK's Peace River Arch properties and their Inga/Fireweed jv, these two companies will continue to operate separately for at least another two years in the hope there is no play for either company while they build their production and land base. What doesn't make sense is for KEL to make an offer for RTK now as that would only put RTK into play, putting the assets into the hands of a stronger and bigger company.
You say you wonder if there is a trade in the stock short term with a run as high as $4.50. I have no idea, but think it is unlikely.