RE: RE: What's Next? Hi db, I am here (sorry I usually post on the yahoo private board).
I believe this is a good transaction; this is how much we got for the sold hunton assets:
The sold assets had 2.24m barrels gross (1.8m net) in 2P reserves (73% NG), this
means Atlas paid $8.3 per 2P gross barrel and $10.3 per 2P net barrel.
This is a good price for 76% NG reserves, applying this same multiple to the
core Hunton would give us a value of $249m, even though the core Hunton is 46%
Liquids. Likewise if we apply a 6 times cash flow to the remaining Hunton assets (same multiple as the transaction) we would get a similar valuation in the $240m to $250m range.
I currently estimate the value of the Canadian assets to be between $80m and $100m, if we were to get $90m for those assets, we will end up with the core Hunton and $25m, based on the valuation I provided above, the stock would be worth north of $6.
The key question is how they will retain the assets, if they go for the trust model, and pay a decent dividend we could be looking at $7 or even $8 per share.
I believe we should hear the news on the Canadian assets in the next few weeks, after which we will have full clarity on the path forward; we are certainly on the right path.
Regards,
Nawar