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

Good numbers

[dalerules88]

Considering Q4 condi averaged $53, to come up with is surprisingly good as far as I can see.

I'm looking at 2019E cash flow like this
Q4-2018 adjusted CF $0.93 ($3.72 annualized) - @ 352.6m shares = $1,311 bill
that was achieved using condi avg. $53.57/bbl

so far in Q1 we have:
Jan condi avg $64.46 and Feb $68.43 = simple avg. Q1 so far $66.45 - tha's a 24% premium over Q4-2018

let's say condi prices hold (mind you, trend is up), you get 1,311 +24% price increase = 1,625 bill
maintenance etc capex budget is 1.25 bill
that leaves, at recent condi prices $375 mil free cash flow - they could buy back 10% of the outstanding shares with that, or pay down debt

then of course we have Q4-2018 higher than average realized NG prices, which have since declined, but that's so far been roughly offset by the big jump in AECO in Jan/Feb 2019, so, being lazy, I'm gonna call that a wash

as for production levels, I think they're simply lowballing - they deferred 7 wells from Q4/18 to Q1/19 (or was it H1/19?), anyway, I think they're being ultra conservative with their production estimates 

as for the reserves, I'm far from knowledgable on the valuation methods, but aren't they done more or less on a mark-to-market basis? If that's the case, then with the low year-end WTI/condi/NG prices, not surprised that there's no growth - would be curious to see what the reserve volumes are, relative to past, rather than reserve $$ - anybody with some info on this - that would be appreciated

so overall, even if prices just stay FLAT and production averages 200+, they're likely to trade @ roughly 9.0 x Free Cash Flow (375ml FCF/352ml @ 9.62/sh closing today) and roughly 2.1 x Operating Cash Flow (1,625 bill/352ml shares @ 9.62/sh closing today)

In the end, cash is king, and if these guys don't screw up operationally, this company will be spitting out lot of it, if WTI goes any higher than $51 that we've been averaging in Jan/Feb; I'm betting WTI will average at least 60-65 in 2019 so that leaves further 20-25% updside from my 1.625 bill CF estimate above; if they pull off 2019 with 1.95bln in operating cash flow, we won't be trading at 10 bucks, I'm pretty sure, given that most of the Capex is largely done with for now


my 2c

[RollinInDough]

I am sure we all appreciate everyone throwing around their numbers... interesting to see where they go... but for me... not knowing all you posters from a toad... I will go with what the company releases... their recent presentation puts out their numbers as I posted... I use their numbers, like their numbers cause... they go through the ceo, cfo the board and all operations guys.... I strongly

[dalerules88]

no doubt management knows better than any of us but clearly with the share price reaction today the market was not happy about something; I'm just putting some color on the numbers, strictly from my viewpoint bottom line is 2019 break even needs 200,000/bbd and $50 WTI - anything over that, on either metric, is free cash flow - I hope they're buying shares back at these prices; not sure

[RollinInDough]

no problem, I was not meaning to be mean... just pointing out the company has said they will have half a bill of free cash flow and they base that on pretty conservative prices like $50 wti... which we ahead of... and aeco much lower than present although prent prices are not sustainable obviuosly as shoulder season approaches. The TSE allows for a 10% open market buy on share buybacks and they

[dalerules88]

Check the numbers please, from what I see on the presenteation, expecting 1.25bln @ 50WTI, and sensitivity shows about 250ml for each extra 10WTI, so that would mean 1.75bln total cash flow (500ml free cash flow) @ WTI 70. Unless I missed something.   I think the NCIB is good for a year from approval but I think it was approved only recently (last fall?) They bought back just over 3ml

[RollinInDough]

check the numbers?  are you kidding... they release a forecast for the year and you say todays oil price is higher?  so what , does it mean they are wrong cause the oil price has had a run up?  it goes up, it goes down... they put out a conservative estimate that I think is reasonable... one should never invest based on higher prices that may not hold... but if you say so....

[Olllllllie]

Yep, I'm with you guys, $5/600M of FCF this year, prob more given oil is priced higher than their forecast.  Given the current market reaction, the only think I can think of is experts know something we don't - I read the financials multiple times and I can't find it.  Best of luck to all. 

[dalerules88]

they're beating up on it because they can - once the chart broke, we were kinda doomed, technically.. plus some are picking up dry gas co's, with AECO nearing 4 bucks and all ... I kinda doubt that will last, but still, PEY and AAV are relatively cheap, even with the runup ... the AECO futures worry me still, but at least these two are making + cash flow at anything over a buck or so

[dalerules88]

I believe you said 1.75bln cash flow at WTI $50 - I can't find that ... please help me locate it; otherwise, I see 1.25bln cash flow at WTI $50 going up to 1.75bln @ WTI $70 on their January presentation.. thanks for clearing that up