CONA RESOURCES LTD T.CONA

Wow

[xbox360]

So at $2.25, Waterous Energy Fund lost about 90 million in share price valuation. Not sure if Waterous acquisition made the price drop, though I guess he should've waited longer to purchase his 67% ownership if it was not the Waterous acquisition that made the price drop.
According to Cona's Q2 report, the company should be able to pay back close to 30 million per quarter and/or generate ~30 million in FCF every quarter. They may have overstated their FCF, though it should be over 20 million per quarter. So, 100 million in FCF per year and the market cap is around 200 million? It should take the company two years to pay back about 50% of their debt, in a conservative estimate. After that, the return per share price basis is close to 50%.
If Waterous is not offering to buy the remaining shares, the shares should be trading at least double the price in two years.

[OOU812]

"So, 100 million in FCF per year and the market cap is around 200 million?" Free cash flow is around $50 million a year.See link, pg 8 https://www.conaresources.com/uploads/Documents/cona-corp-aug-2017.pdf

[ppp]

Capex of 60 mil seems a little high to stay flat for production. These guys say they have a decline rate of 12%. So they need to replace just over 2000 bbls a year. So 30,000 per flowing. Cheaper to buy production at the moment. 

[xbox360]

Yeah, 50 million is the correct number after the Capex. They have stated that their decline rate is close to zero at the Cactus Lake, which accounts for 50% of the production, so Capex should decrease while production increases. Since they also stated that their current Capex return is between 50% to 100%. Compare that with the decline rate of 10% to 12%. Anyway, just simple calculation if

[OOU812]

Heavy oil normally trades about $25 lower than West Texas see link for graph of WCS price. https://economicdashboard.alberta.ca/OilPrice Currently heavy oil (WCS) is only trading about $12 lower at $48 cdn. Don't expect much more than $75 bbl cdn for WCS if WTI goes back to $100. Royalties increase quite a bit if the prices go up and so does drilling costs. Free cash flow will be quite a bit

[xbox360]

Yeah, was just doing a draft analysis. Anyway, attractive buy at the current price, unless Waterous's plan is to bankrupt the company and then take it over lol. Danish Maersk Oil was bought for about 5 billion, the company is about 10 times the size of Cona in terms of bpd and reserves, with similar debt size and structure (considering differences in cost and the oil type). Cona's

[OOU812]

Based on Cona's cash flow for 2013 and 2014 (WTI averaged $102 cdn) and using average production of 17,000 bopd.Yearly cash flow would be around $200 mil and free cash flow around $130 mil.

[factRbest]

xbox360 - (8/18/2017 2:13:18 AM) Wow So at $2.25, Waterous Energy Fund lost about 90 million in share price valuation. Not sure if Waterous acquisition made the price drop, though I guess he should've waited longer to purchase his 67% ownership if it was not the Waterous acquisition that made the price drop. According to Cona's Q2 report, the company should be able to pay back close to