Chinook Energy Inc. Common CNKEF

RE:Growth drivers and why Station 2 will remain above C$2/mcf

[stockfy]

Henry Hub is another 5% UP today in the U.S. reaching almost US$3.30 per mmbtu. This is great news for CKE that sells about 1/3 of its natural gas proidcution at Chicago Citygates receiving premium pricing in USD.

That's also great news for CKE's natural gas production sold at Station 2 that will remain above CAD$2.40 once Toronto opens tomorrow. Station 2 closed at CAD$2.45 last Friday.

stockfy wrote: Station 2 price closed at C$2.45 per mcf yesterday. I did the simple math in my previous post and I proved why if Station 2 stays above C$2.20 per mcf for the whole Q4, CKE will generate additional cash of C$1.13 million in Q4 alone and will exit 2018 with zero net debt and cash of about C$0.5 million. 

Based on the latest guidance, CKE's price assumption is just C$1.44 for Q4, the difference with today's Station 2 price is big, it's almost C$1 per mcf.

See also the charts below that explain why Station 2 is not going to return below C$2 per mcf in 2019 and the next years.

LNG Canada alone adds more than 2 Bcf/d demand.

See below the charts with the growth drivers and the projected demand growth from 2019 until 2024 in Canada.

Meanwhile new pipeline projects are added to CKE's core operating area in Aitken Creek and Birley/Umbach like the North Montney pipeline that will be completed in 2019 and Coastal Gaslink for the LNG Canada project that will be completed in 2021: