Material Change
I would go as far as saying this is a material change for NVA.
152 million in Debt Reduction ( 58+94 = 152) 152/225 million share =
68 cents a share in debt reduction.
DEBT TO CASH FLOW
If i use the net debt number from Q3 and CF number from Q3, net debt to CF is now below 3.0 around 2.8 times. I am guessing Q4 cash flow will be much high than Q3 funds flow was about 166 million.
I have reduced the net debt number to around 471 million from 623 million.
With changes in commodity pricing, and new high worth production from Bilbo and Pipestone, the debt will likely go up a bit with the capital required to complete 22 wells.
in their plan they were going to complete 14 wells for 55 million dollars, spending 60 million on new wells.
22 New Wells
The press release say they are going to bring on 22 new wells,
The 14 wells DUCS is what is required to maintain produciton, the other 8 wells is growth.
So i can see NVA clearly pushing the 60,000 boe a day mark and a time when commodity prices are excellent.
Debt will crept up a bit from here but production will creep up faster and prices are solid.
NVA is off to the races, 67 cents a share debt reduction, 22 wells coming on stream, 60,000 boe in the line of sight.
My guess is the stock move from High Risk Dead Duck, to 2.0 X CF and off to the races by the end of Q2.
The new honeypot price target, based on speculation with execution risk factored in is $2.50 a share.
Well done, NVA management pulled a Rabbit out of the Hat.
IMHO