Prairie Provident Resources Inc T.PPR

Saturn's Viking Oil Purchase Metrics

[energee]

Table below from SOIL news release yesterday, $260M light oil production and land purchase.

Using metrics from the SOIL Viking oil purchase, PPR @ (with 65% liquids) @$65K flowing boepd implied value of PPR's 4175 boepd is $271.3M, and 9.1M PDP reserves at $25boe implies $227M reserve value.

PPR has higher OPEX, lower netbacks, warrants O/S, some hedges so not a true comp by any means but shows that valuation metrics are moving up.

SOIL Viking Acquisition

Acquisition Metric	Recycle Ratio2
Production	4,000 boe/d	$65,000 per boe/d	-
Run Rate Cash Flow[6]	$129.5 million	2.0x	-
Reserves7
Proved Developed Producing	7.1 mmboe	$37.14 per boe	2.4x
Total Proved	10.4 mmboe	$25.00 per boe	3.5x
Total Proved plus Probable	13.5 mmboe	$19.26 per boe	4.6x

[filefish]

Yes , definately worthwhile to review the numbers as the deal is in their Neighborhood. But as you point out, PPR's  performance is not as good as the SK Acquisition performance so implied value is probably much less than the 500mil. Would have hoped that this would move the stock a little but since the PPR land package for sale is still on the market, a higher valuation is not likely to

[Buyreallow]

You also have the problem that PPR has been forced by their bankers into bad hedges due to their high debt.  And some of them carry over till the end of next year, so limits their upside as they do not have the finances to do much drilling to fill in their depletion.

[filefish]

They will be doing more drilling this year than they have in the in the past few years, so production should stay level or slightly up depening on the waterflood response at Michichi. Any potential buyer of PPR would need to have a vision beyond a 1 year time frame.  If they could restructure their debt instruments  into a 5 year term loan, there would be  more clarity for a buyer