AAV Nice Move Today on a Flat dayPlenty of issues for NA natural gas producers for a while. Oversupply today, warmer months coming, cooling demand tbd, storage issues etc. Lot's of short-term negatives but AAV is very solid and has the Entropy value add bonus. AAV growing their oil exposure too.
AAV market cap today C$1.446B - Doing share buy backs
BIR market cap today C$1.359B - Now paying a 50% reduced dividend (yield now about 7% on lower SP) and delaying D&C CAPEX - low gas price issues...
Given the obvious property synergy, if I would be shocked if the IB's are not pitching. Larger is often better for efficiencies (although AAV still has an exceptionally low OPEX) and both of these Co's are still believed to be mid-size. If the two got together and the gas eventually makes it onto a ship off the coast of BC, a new story. Probelm is the acquiror always seems to drop in value. Perhaps BIR should try?
When you control the natgas acreage/facilities you win. These two companies have done a good job of capturing the natgas resources and building owned facilties for future drills. Natgas mining today.
Reminder that Topaz owns 12.5% of the AAV Glacier gas plant and TOU owns a large piece of Topaz.
TOU also very bullish on natgas.