Ante Creek Coquina NPVIn observing the RMP BB on Investor Village, there is some discussion regarding the estimated NPV for the best Ante Creek wells (original six sections).
In my model I am using the latest reserves estimate provided by RMP, and am marking this up by 30% or so to get to 750,000 boe EUR. Combining this with current oil/gas prices, I come up with an NPV of $28M/well.
ASSUMING all six sections contain the coquina, AND all provide this EUR, together they are worth about $672M. Decrease this if you are not comfortable.
Moving on, decreasing the spacing to 8 wells/section, RMP will lower their overall royalty rate, and can up their overall drainage on the pool. Ultimately, I am estimating an NPV of $750M for the Montney across these six sections.
I believe that these are on the only lands where RMP holds Duvernay rights. I have estimated another $18M NPV (probably conservativ) for the Duvernay. Adding it all together, I come up with $768M ($750M + $18M). Divide this by the current 119M shares, and these original six sections are worth a handy $6.45/share. Pretty darn good if you ask me. Oh, and did anyone say Belloy? RMP are currently drilling this formation too for good measure.
Right now, the only downside seems to be the competitive drilling going on. RMP seems to be focussing on defending its edge lands in the 6 section pool, and rightly so. The downspacing will come, but only once they have the time and rigs to do so.
I hold an ungodly number of RMP shares right now. RMP comprises 73% of my entire portfolio. Call me crazy, but I trust this management team, my calculator and someone above. The winds are still in the sails for the energy market, the Fed is keeping its pedal on the gas and I see no reason to leave the party.
This is all in my humble opinion (AIMHO). As always, do your own due diligence to convince yourself of the potentail of this company.
Good luck to all, and see you at $7!
L6