RE:RE:AltaCorp comment from todayA few key reasons
1. Altacorp and other Canadian investment banks know John pushed back on offers and has gone into delusional turtle mode
2. The primary valuation metric for E&Ps is NPV. E&Ps trade at EV/EBITDA or EV/DACF ranges of 3X (RMP lowest) to 12X. However, valuation on an NPV basis is much tighter at 0.8X to 1.3X. Since the minimal reserve adds, lack of acreage delineation, and limited capital access have limited this process, reality or perception the market believes the resource value of RMP is low despite strong core well results. A unique and odd phenomenom.
3. John's aggresive move into Gold Creek can be viewed as a potential positive but also an admittance that resource upside from legacy Montney positions is limited
4. Core Gold Creek is owned and many operators know what was available. Any well capitalized Montney player could have outbid RMP since the capital outlay was small for many other companies with a strong equity price, low capital cost, and excess liquidity from bank lines
So the market see this as throwing darts
5. Equity raise and we're going to build more infrastructure. Dumb move. Sell your existing infrastructure (which market ascribes zero value to), lease back long term, and don't dilute your shareholder with 25% cost of equity.
6. Whether or not Gold Creek has some good wells, RMP will never be able to develop the resource properly and NPV will move up marginally given their limited liquidity, extremely high cost of equity and insistence of building more midstream which further reduces the opportunity to delineate a resource and get credit in the public markets.
7. No mention of a 2-3 year plan to create value via reserve and resource additions. Business as usual......"these aren't the droids you are looking for.....move along"