Seven Generations Energy Ltd. class A common shares T.VII

My Take Part 1

[retiredengexec]

I looked at Proforma FCF of the combined entity with 340 thousand boepd. 200 gas, 100 oil and condy and 40 Ngl. Using cdn prices of 70 for condy, 350 for gas and 18 for ngls we get FCF of 1519 million with 805 from VII and 714 from ARX. This works out a ratio of 1.13 in favour of VII. since I dont know at which time and price the deal was struck it shows the deal is reasonable. That said I would have preferred using the value of 2P reserves. I think HP said that CPPIB owned about 16 percent of each it is obvious they saw ARX as the better co.

[WAS1]

Does anyone know what the break fee is on the merger?  Usually those numbers are front and centre when these deals are announced.

[sirmevl]

330 million shares outstanding for vii and ARX is 350 million so which is about 5% difference so would the extra 11% extra vii got not actually be 6% in terms of evaluation?  

[retiredengexec]

Sir I did not normalize for number of shares. I'm driving so let me work the numbers

[retiredengexec]

So normalizing for number of shares raises premium to 1.189.