They are marketing that asset and part of recent pop might be due to interest on that large land holding in East Duvernay..
From Canada Stockwatch
The Duvernay has been much in the news lately, after Crescent Point Energy Corp. (CPG: $5.32) agreed to buy Shell Canada's Duvernay assets for $900-million. Regarding its own Duvernay assets, Journey says it is "actively seeking opportunities to monetize [them] or find a joint venture partner." The TSX energy index added 4.64 points to close at 125.20. One of the more surprising gainers of the day was Alex Verge's Alberta Duvernay-focused Journey Energy Inc. (JOY), which shot up 33 cents to 83 cents on 1.02 million shares, notching one of the best and busiest days in its history. The company released its year-end financials late last night. Happily, for the first time in nearly a year, these did not come with a warning about "significant doubt as to the company's ability to continue as a going concern."
Journey first planted the going-concern red flag last spring, fretting over its strained credit facilities amid the new COVID-19 downturn. The bankers were in the process of steadily reducing Journey's credit facilities as part of a schedule arranged in 2019. They paused the reductions once the downturn took hold, but at that point, the facilities were good for just $75-million and Journey was already $74.3-million drawn. The parties signed a forbearance agreement and entered several long months of negotiations.
In October, Journey's major shareholder, Alberta Investment Management Corp. (AIMCo), stepped in and agreed to refinance all of the bank debt for $38-million (turning itself into Journey's largest creditor as well). Mr. Verge triumphantly declared that Journey was back in charge "to control our own destiny" -- but not really, because now it had to repay AIMCo. This led it to announce a $15-million asset sale in November. The assets were desirable, and the deal would have eliminated nearly one-fifth of Journey's 8,000-barrel-a-day production. Investors were unhappy. At the time the sale was announced, Journey's stock was about 14 cents, down from nearly 70 cents in May.
Then Journey's luck finally turned. As the proposed asset buyer struggled to complete the deal, Journey extended the closing date a few times, but eventually oil prices rallied so much that the cash flow from keeping the assets outweighed the benefit of selling them. Journey terminated the sale last week and pocketed the $902,000 deposit. It added that it was making headway on its debt to AIMCo. Last night's financials provided an even fuller picture. Some risk was acknowledged -- particularly with $21-million of debt coming due to AIMCo later this year -- but instead of expressing "significant doubt" about Journey's going-concern status, the financials used the term "could cast doubt." Like parents whose failing child finally brings home a D instead of straight Fs, investors were overjoyed.
Journey's improving report card also allowed investors to shift more of their attention to its operations. The company owns assets in the Alberta Duvernay, which it partially farmed out in 2018 to Pat Carlson's Kiwetinohk Resources Corp. (The first word is pronounced key-wheat-in-no, but Journey wisely shortens the whole thing to KRC.) KRC spudded three wells on the assets in 2019. Had it spudded more wells in 2020, it could have earned a higher interest in the assets, but the pandemic hindered its activity, and Journey (in another stroke of luck) ended up retaining a larger chunk of the assets than it had expected. The Duvernay has been much in the news lately, after Crescent Point Energy Corp. (CPG: $5.32) agreed to buy Shell Canada's Duvernay assets for $900-million. Regarding its own Duvernay assets, Journey says it is "actively seeking opportunities to monetize [them] or find a joint venture partner."