TSX:JOY - Post Discussion
Post by
hawkowl1 on Jul 31, 2022 7:10pm
Energy summary July 29 Journey energy
In non-financial-reporting news -- for the most part -- Alex Verge's Journey Energy Inc. (JOY) soared 71 cents to $5.66 on 1.4 million shares. While it did release its second quarter results today, its bigger news was a "transformational" asset acquisition from Enerplus Corp. (ERF), up 29 cents to $17.87 on 1.81 million shares. Enerplus is primarily a U.S. producer and put its Canadian assets up for sale earlier this year. Now Journey has agreed to buy some of the assets for $140-million.
The deal will add 4,400 barrels a day to Journey's current production of around 10,000 barrels a day. Analysts have been valuing Enerplus's Canadian assets at around $36,000 per flowing barrel, and as Journey is actually paying about $31,000 a barrel, management is feeling quite pleased with itself. The more risk-averse in the group will undoubtedly be aware that Journey is not leaving itself much of a financial cushion. To pay for the assets, Journey is spending all of its cash, extending the term of an existing loan and taking out a new loan at no less than 10 per cent. Yet management said breezily that this should be no problem as long as oil and gas prices stay reasonably sturdy. The reaction in the market today indicates that investors are in favour of the gamble.
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