Saturn Oil & Gas Inc. T.SOIL

Are the Oxbow area assets any good?

[EstevanOutsider]

I remember when that area use to be a boomtown, that ended in 2014. Frobisher had a 24-hour restaurant and the Oxbow real estate market was running wild. Lots of legacy production there. Crescent Point made it sound like the assets were trash but Saturn made them sound like the yellow brick road. 

Anybody have first hand experience? I think they are viable assets in an atmosphere of $65+ oil. Shallow oily Mississipian/Frobisher wells. 
 

They got them for free but assumed the liability. Assume they can get some cash from the government abandonment programs. Probably quite a bit.

[oiltycoon11]

I asked myself the same question, but If you go through some of CPG's old quartly updates they have praised the area for years for the economics and calling it a key area for their company. Also as a 3rd party, ScotiaBank puts out a playbook every year that ranks all the oil and gas plays in North America based on the economics. If you look at the top of the list it's SE Sask Mission

[BobTheKnob2]

My feeling is that this was a win for both Crescent Point and for Saturn. Crescent Point won because their net debt was reduced and they also reduced their ARO by 25%. Saturn wins by getting long life production, pipelines and infrastructure to market at a reasonable cost. Crescent Point can now focus on higher impact production and paying down debt. This transaction is a company builder

[Theconsortman]

As long as Saturn can up the production and oil price stays high and they are disiplined to begin reclaiming old sites etc. They likely won't be able to quick flip this asset to anyone else as it was shopped for a long time with no takers so they are in this for the long haul. This type of transaction was pulled off in AB for years with larger entities shedding "non core" assets

[peterj99]

They hedged a lot of production for years. What is it that you don't get LOL? BTW it looks like Saturn survived even though you said the sky was falling on Saturn.

[Theconsortman]

It was. The Viking play they were in was at a dead end and they were fully drawn on their credit. They had two options: 1) Give up and put it up for sale in a buyers market and receive a few pennies per share OR Buy a new shiny toy, promote the heck out of it and hope for really oil price. They chose door #2. The property they bought has a $250 MM ARO. Do you understand what that means?

[Theconsortman]

Sorry ARO was $220MM not $250. So if they ever try to vend this it goes: 1)ARO 2)SECURED DEBT 3) UNSECURED SHAREHOLDER  Is the company worth more than the estimated ARO+ outstanding/issued debt? ARO= $220M Prudential Debt $20 M New Debt  $87M Total $327M for a company making 6700 boed/d + 400 boed? = 7100 BOE/D About $46k per flowing BOE....

[peterj99]

Strange, the lenders seem to be OK with the deal (just like the last time). But, as a peace offering, I'll give you credit for something, not sure what though LOL.

[Theconsortman]

Of course the lenders are ok with the deal. They are in front of thge shareholders when it is time to get paid. Are you a lender or a shareholder?

[peterj99]

Right now, I am a shareholder. If this was a total bust, the lenders would be holding a huge part of the bag. They want their money back with interest and then some. They just don't lend money without due dilligence. The lenders have a lot more at stake than I do. You too can become a shareholder, and you don't even have to disclose it LOL Unless you want to. Just put the number of

[Theconsortman]

Why would I own something like this when I could buy something like WCP? or TVE?