Dawson - are the economics really competitive? Dawson's boe's are valued at about 26.67 for boe, and their capex budget is 240 million and last quater it only produced 91,000 boe with a yearly capex of 240 million dollars.
Kakwa boes are valued at over 42.58 dollars for a boe, ant they produce 180,000 boe and their yearly capex is 525 million dollars all have cycle.
Unhedged
So at kakwa their capex costs are a little higher, but the revenue per boe is significantly higher, 42.58 - 26.67 = 15.91 more per boe
Or Kakwa generates 15.91/26.67 = 59% more CF per boe then does dawson.
So it means almost a 40% better return when you include the capex differential.
What is wrong with management?
Pouring capex into dry gas, and 2 percent debt does not improve FFO the same way a pursuing liquids rich 1/2 cycle plays like Kakwa.
Dawson should have its capex cut to zero and it really is a collection of postage stamp plays and they should be pursuing Kakwa.
IMHO