GREY:STPJF - Post by User
Post by
deductionon Apr 12, 2013 2:21pm
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Post# 21248000
BMO comment
BMO comment Basic comments were:
- Market is beginning to draw doomsday comparisons to OPTI and Connacher, however OPTI had technology and lower qualtiy issues and Connacher was to leavered and had no other producing assets.
- they peg STP's cash break even at 2,500- 3000 bdp for McKay (implying their other asset is supporting) and they are not close to any near term liquidy crunch
- STP currently trading at a ~70% discount to thier risked NAV. this implies McKay Phase 1 reaches only ~50% of design capacity. The only analogue in industry is the worst performing SAGD to date - long lake.
- They also give a nice chart of WTI price and utiliziation. At 50% utilization and $90 oil it gives $0.71 NAVPS. at 60% it is $1.17. (a slight move in mediorcrety will cause huge price difference). Of course if they can get up to 80% then we are solidly in the $2.00/share range.
- One final note of interest - they comment that the four most mature wells - the reservoir is apparently allowing steam injection rates to expand.