Santos Ord Shs T.STO

Some Intersting Info on PRY

[larsen6]

I acknowledge and thank terroir on the IV Oil and Gas Discussion BB, who provides the following regarding Pinecrest. 

 

For those of you thinking of voting 'yes' for the Pinecrest takeover, have a look below at what you are getting into.  And again, I remind readers to have a look at the Pinecrest chart versus that of Spartan in the last year as 'proof in the pudding'.  We deserve a better deal.

 

L6

 

"We have done a lot of positive reinforcement on PRY over the past few months, but I, for one, am jaundiced:

 

• Fidelity fled the ship from August through who knows when. Company says they reduced position from 20% of float to 12%, that's 8% of 220 million shares, or 16 million, of which 6 million have been reported.
• Q2 production was below expectation, blamed on weather related outages, and the production type curve chart was dropped from company presentation. Company said outages made chart unusable, promised to reinstate when more data available.
• Q3 production below expectation, again weather blamed, but type curve chart not reinstated in presentation. I have to bring my type curve data down to slightly above type one to produce average production
• Waterflood data presented showing 500% increase in pilot flood, from 12 bbls/d to 88bbls/d; however, 50/50 partner in pilot, Lone Pine, presents different results, describing substantially less increase ( still over 200%) - Company declines to comment on discrepancy.
• Street surprised by amalgamation with Spartan and transfer from growth junior to yield stock similar to income trust model, targets and ratings dropped to reflect "no growth" production guidance
• Q3 results, poor, presented without comment or conference call as president is on road show selling the deal
• Further drops in analyst rating due to concerns about decline rate and ability to replace expected decline with announced capital spend.

 

Frankly I can't see selling this deal while dragging down the Sparton share price and not addressing the concerns about the underlying production curves. Ok, tell the CIBC analyst that he has it wrong using an average decline rate, but then back that up with well by well data.  

 

Is there a major concern here? "