RE:Very Nice brakeoutGambler from the Q2 2020 financials you can see that Crew's 3 and 6 months ending June 2020 average natural gas sales price was $1.76/mcf/day and $1.81mcf/day respectively. The ability to now hedge 2021 natural gas volumes at over $3 mcf is significant.
Q2 financials show total daily gas production at 95-97 Mmcf/day. Crew is playing it safe and smart by drilling these new wells in the heart of it's West Septimus field and it will allow them to bring 21 - 28 Mmcf/day of production on stream in the next 5 months which will not only offset production declines, but should also increase their daily gas production.
Crew has the closing of the second tranche of it's facility interest in November 2020 ($23 MM) and the option to sell more infrastructure interest for $37.5 MM. These events will significantly improve it's balance sheet.
Crew also had hedging GAINS of $3.34 and $2.51 for the 3 and 6 months ending June 2020. Their hedging program was hugely successful and it really saved them from a disasterous first half.
If they are considering selling the company then as I mentioned before they will be negotiating from a position of strength rather than desperation.
Boosting corporate production prior to a sale is often one selling signal. Crew's decision to drill a seven well pad versus a 4 or 5 well pad will highlight the potential of their West Septimus lands. They are going to increase their gas production and have it hedged at attractive prices.
The unsecured debt of $300 million is not due until 2024 and it more than likely can be extended or renewed. Any party considering purchasing Crew, would only require cash or financing of approximately $300 million and assumption of unsecured debt for a $2 per share offer. They would also have a $150 million bank line available.
Watch for sales of non-core assets in order to reduce debt ahead of a sale, as these assets usually will not enhance the selling price and can often reduce it or recover no value.
Exciting times ahead for Crew and it's shareholders.