RE:RE:Congrats Crew on the New Record Production Rate!Oldnagger, Crew appears to be extremely focused on getting it's financial house in order. We must remember that only 2 years ago they were on the brink of bankruptcy with a $0.16 share price, terrible commodity prices, declining production, runaway op costs and a mountain of debt.
Crew escaped from their dire situation (they were almost up against their bank lines) and survived by doing that crazy facility deal and using the proceeds to drill themselves out of trouble. Painted Pony was not so fortunate, as were others like BlackSwan, Jupiter and Modern. Even the Kelt Inga and Storm transactions are looking like absolute bargins in light of todays commodity prices.
Crew management were smart and oh so very lucky with their timing. They have been drilling phenominal wells, increasing AFF and it appears that perhaps for the first time ever, they really have a handle on their assets. If they are financially responsible and grow their production at a sustainable rate, then their future is very bright. They have a fantastic facility and infrastructure location, which is surrounded by an extremely productive land base with enough drilling locations to last over 100 years.
There is no need for Crew to drastically ramp up production at this point in my opinion as the recent jump in commodity pricing will help to yield a similar increase in AFF as a production jump to 40,000 Boe/day would have at Crew's historical commodity pricing. With LNG Canada more than 60% complete and with a potential start up date of 2024-2025, Crew may want to target that date to significantly ramp up production, as natural gas prices should be at a premium. They should easily have their debt reduced by then also.
The addition of John Hooks to their board really caught my interest. John and his company Pheonix Technology were the experts on directional drilling during my early years in the oilpatch and his expertise and industry connections in horizontal drilling and completion applications will be invaluable to Crew. The question I asked myself was, "if Crew is considering exiting then why are they adding a directional drilling expert to their board?"
The plot thickens.
As for the amount of capital required to maintain and grow their current production to 40,000 Boe/day, that is anybody's guess. If they have success re-drilling their existing Septimus lands for other zones then I am guessing $125 million per year. If they are building out infrastructure in Groundbirch then the price tag would likely jump to $175 million per year. A combination of the two would likely be somewhere in the middle at $150 million. Totally ball park numbers though Oldnagger as Crew doesn't break out their costs for us.
In any case Crew is on the verge of becoming a very stable, predictable, conservative and boring energy company...and I love it.
BTOS