RE:Dundee - Reiterating BUY Rating, $2.45 target price pending Good post blackgold909! It looks like Dundee is using a 10 year drilling window for Gold Creek development and a 2 well/section density risked to 65% of the acreage as being prospective/accessible. It's a rather solidly conservative estimate - and I think - a good place to start. But I think there's still much more value to realize.
There is a push to increase Montney drilling density significantly beyond the usual 4 wells/section. For example in Kakwa Paramount increased to 8 wells/section (200m spacing) by vertically staggering adjacent HZ's by 50m TVD to more effectively drain a 100m gross interval. I haven't heard of any interference reported. So once RMP has some actual HZ's producing long term the drilling density assumptions should get more bullish with good well performance.
Another area for optimizing value is drilling and completions. Advantage's work in Glacier during 2014/15 for example increased their HZ lengths while increasing stage #'s and decreasing frac size. The result were much better performing wells with higher reserve recovery. Other new risk-reducing advances like coil fracks using sliding sleeves add investment certainty.
RMP is now positioned to get much more aggressive - to retain land, evaluate and grow cashflow. I believe that growth in value will exceed Dundee's forecast (as it should). It will be interesting to see if a second drilling pad shows up for Q1-17.