Post by
MyHoneyPot on Nov 09, 2023 12:56pm
Significant AFFO with low gas prices?
In the Q3 results the big plus sign are in the condensate production.
These are table pounding results....
In the Wapiti area, a 6-well pad on the Gold Creek block was drilled in record time, testing full co-development of the Middle Montney with the emerging zone - the Lower Montney. The wells all averaged 1,975 Boe/d (55% condensate)(2) each over the first 30 days of production. The three Lower Montney wells on the pad exhibited strong deliverability and particularly high condensate rates, averaging over 2,200 Boe/d and 63% condensate each(3). This result drives the expansion of the Gold Creek infrastructure capacity in 2024 and reinforces the exceptional economics in this area of growing well inventory. Additionally, a 5-well pad was drilled on the Bilbo block, including one infill pilot well in the C zone, drilled between two legacy wells which have produced for almost a decade from the B zone immediately below. The infill well has produced an IP30 of 1,200 Boe/d (67% condensate)(4), versus the pad average IP30 of 1,400 Boe/d (52% condensate)(5) per well. This is a highly encouraging initial result regarding future infill opportunities on the block, showing depletion from the two legacy wells below the infill is well within acceptable economic bounds.
In Q3 after capex was 110 million, and with 202 million in AFFO they are dripping with FCF and now have the options to do things.
Share buyback with a small float and three hedge funds have big blocks of NVA stock, making the float pretty small. So share buyback are going to have a long of torque.
Not only have their had great production numbers wells with 67% condensate are fantastic, and going forward they will have about 100 million in cash to do with what they want, (Share buybacks, Debt Reduction, Increased Production)
Gas is going to be a bonus as prices increase through the winter, the first cold snap and the stock with start soaring.
NVA is hitting it out of the ball park with zero debt. When you see CPG buy a company with wells that just don't get the same result, and have the production for roughly what NVA is trading for. This company is a steal and trading at 1/2 price and spewing out cash for shareholders returns.
IMHO