RE:RE:BNE flirts with 52 week highs
Blackdog thanks for your wise comments. The market is shifting slowly back to flowing barrel metrics as more M&A transactions occur forcing a midset shift from survivor vs going concern. Once this shift occurs some recent high flyers get capped while other move higher. The recent transaction by SDE was accretive on most metrics(naturally with cash components) however it was not on a flowing barrel basis and the stock got hit hard. Think management teams will have to pay more attention to what they are paying. The next shoe to drop is the migration from PDP values to 1P and even 2P considerations with FDC being met with CF. Here BNE is in prime position with higher reserves per share then peers. OBE in its latest presentation showed reserves using flat deck of $60 & $70 which I encourage all management teams to include because 2020 YE reserves used an exceptionally low price deck. Using $70 flat oil deck like OBE used BNE 1P and 2P would be about 33% higher then OBEs. Their presentation highlights how cheap their stock is on this basis. (BNE could show the same and more - $25+ 2P) The re-rating is coming in the sector its just slow, especially for those hoarding free cash flow at the expense of creating shareholder value. Believe BNE 30% production growth and first mover status to 2019/20 restoration levels has allowed for a better valuation.(hence recent strength while other peers are down 20%+) Management teams more concerned with corporate lifestyle wont fair as well over next 12 months as those teams more closely aligned to shareholders like BNE.