Bonterra Energy Corp T.BNE

CIBC take on the Obsidian offer

[blackdog]

Revised analysis 2021 02 17. No great enthusiasm for BNE in the near term, but this is interesting:

We do not see the Obsidian offer as being an overly enticing outcome for BNE holders. Our rating on the shares is tied to the richer valuation (3.9x 2022E EV/DACF on strip versus peers at 3.6x), and above-average balance sheet leverage (3.3x D/CF in 2022E on strip versus peers at 1.7x). Even though we expect BNE’s shares could pull back from current prices, the leverage metrics of Obsidian screen as elevated (FactSet consensus D/CF of 5.1x in 2020E, 7.3x 2021E, and 8.9x 2022E), and we are doubtful the combination would offer meaningfully improved investor appeal (despite the greater scale).

[kavern23]

CIBC is likely right as what is the appeal of Bne combined or alone? Leveraged to the nuts with a OBE combination and they are leveraged if they remain alone. OBE can't raise money in this market...and they need the freecashflow from the 4000 barrels of low declining old wells BNE has to fund drilling programs. But what is BNE accomplishing alone?  Remember the bankers control when a

[AliNaimi]

CIBC is being kind as I dont know what is a bigger obstacle to getting a deal done in the Cardium, OBE's high debt and ARO issues or its FrontFour CEO. Highly dilutive with zero credibity is the response I hear to the OBE term 'The Cardium Champion' by other Cardium players. They know OBE well as CEO shopped around prior to BNE take-under.