Some More Comments Regarding bakken's comment, I think that he can prove an NPV for PRY that is higher too, however, at the present time:
1) I believe that the STO lands are more probable than PRY. This is why I am willing to put a 90% success rate on future drilling.
2) STO lands are accessible for drilling all year round. Pinecrest cannot drill in the summer, only produce.
3) Spartan management have the best and most efficient drilling record in the Pembina. They are drilling wells using pad technology in a week. A week!. Pinecrest cannot drill this fast. Correct me if I am wrong.
4) With the exception of the battery issue, Spartan has a lof of existing pipe in place for production. They are able to get to production very quickly, and with little capital expenditure. This has been repeatedly pointed out by Rick McHardy. Does Pinecrest have this kind of efficiency available?
5) Neither Spartan nor Pinecrest can increase their current production much beyond 5,000 bpd without expending $10 - $20M for a battery expansion. Not sure if everyone on both sides know this. This is a neutral point.
6) Spartan's balance sheet is better, IMHO.
7) We have not put any value on Spartan's SE Saskatchewan lands as yet. They need to come into the mix. Everyone seems to be comparing the Pembina and Red Earth. Let us not forget this.
8) I know Spartan's management is first rate. I trust who I know.
9) Pinecrest has severely underperformed Spartan in share appreciation in the last year. Unlike the operational points above, this is more technical. But why would I want my rising shares to be taken over by decreasing ones? Again, for those who missed my earlier post, please put STO, PRY and CPG (for good measure) on a one year graph and compare.
To me, these are all reasons for valuing Spartan at a premium over the current offer. Overall Spartan can organically prove out its land faster, thereby driving its share price higher at a FASTER pace, and to me at less risk. For any of you out there invested in Spartan, do you want your shares to appreciate more slowly in today's market, slowed down by an acquirer who needs your cash? Pinecrest's waterflood is promising, and perhaps 6 -12 months from now I might have a different opinion, but now is now.
In summary, I have been investing in O&G since 1986, and this is the first instance I have encountered where a takeover was proposed at par. I am not interested in giving up my shares like this.
L6