RE:Birchcliff sell-off is opportunityPlutusofCrete wrote:
Birchcliff Energy (BIR) has sold off in recent weeks and now trades at CAD$9.10 with a CAD.80 dividend rate planned for 2023 - at today’s price an 8.8% yield.
https://michaela34.substack.com/p/birchcliff-sell-off-is-opportunity?utm_source=twitter&sd=pf
Birchcliff Energy (BIR) has sold off in recent weeks and now trades at CAD$9.10 with a CAD.80 dividend rate planned for 2023 - at today’s price an 8.8% yield.
Birchcliff has 266 million shares outstanding. I value Birchcliff common equity at ~CAD$5 billion (a higher than average multiple of a bit more than five times EBITDA plus cash balance) putting my valuation of BIR.TO shares in the CAD$18 to $20 range, more than double the current price.
Prices have changed since your article. From your article, the following assumptions...
My CAD$32.00 netback is based on the following assumptions (all in Canadian dollars:
$6.00 Natural gas price per gigajoule (77% of output)
$90.00 oil & liquids (23% of output)
$3.60 operating costs
$5.40 transportation (diversified marketing to Dawn, AECO, Alliance and a basis hedge to Henry Hub)
$5.15 royalty expense (this one is not much better than a guess since royalty rates may change)