RE:RE:RE:RE:Relative values OBE vs YGR
YGR is a hard NO for me. Here's why: the wells suck.its the main factor.do 12,000boe x 365 that's how many barrels they plan to sell take capex divided by total barrels... $24 per barrel vs OBE at $14. Aka very close to half the total barrels per well not considering oil to gas weight. That's 1. That drives debt and can fcf. They can't lower capex it'll be more per boe but less from no growth they need the bigger bills efficiency. So that means low debt repayment aka oil prices fall certain doom 2x with worse wells. So put that aside fcf 27M at 80 wti that's 30c per share. So there running 6x fcf. Now OBE 2.29 per share at 80. 13.80 equivalent at 6x. Plus what does the debt level do per share ... obe has less shares so the debt means more per share. Plus it's at a more meaningful point dividend or removal in 2 yr. Ygr 2yr still be in a bit of a scary position 150M/ 12k boe. Plus removing the debt is worth +4.60 for obe 2yr vs +60c YGR. And the interest saved on OBE is much larger. So to me it's not a question. The question is how can you like YGR and not like JOY? 18M debt removal q4? Estimate. Like 40M FCF in 2022 because it only needs a 40M capex (aka better wells) then it's debt free and less shares and big tax pools... plus power gen assets. And a lower base and income to deploy growth capex self funded.