RE:RE:RE:Another YGR Theory Basically I agree.
your earlier points on halo pad drilling being easier because there are fewer vertical wells to interfere is also a good concept.
I don't know the ipo lands very well. The last takeover added some locations but not sure about quality. At the time of purchase it was almost all gas, but that doesn't mean much in a gas driven reservoir.
BNE had a couple things thst are a little different. The land base appears to me to be more predictable but like you say : pad drilling and and ERH wells are not much of an option because the large number of vertical wells in the area will limit that option.
the second thing is the way the drilling contracts are written. They have a price escalation clause with higher oil prices that also drops with lower prices for cost control.
So my thesis is when comparing BNE to YGR :
The lack of newer drilling tech/approaches is offset by the predictability of the land base and fewer surprises with standard shorter monobore wells. Just like the lower IRR is offset by a lower decline rate. Running a company and its assets hard versus steady as she goes.
YGR has to nail the drilling or you have quarterly production drama, BNE has to drill a little more or there is no growth (apparently investors want more scale now).
Both companies have retired their CEOs so we should be at an inflection point.
I got caught being overweight BNE while trading but I do like the company a lot. It is pretty unique. And crazy cheap. the ceo at BNE is on record stating that ROC starts in Q4 and he wants to complete an acquisition shortly. While still angry at YGR for a few reasons I posted in past I think they are finally managing expectations and the market the way they are timing production growth into the last two quarters. So both should be timely buys.
I have offset my BNE exposure with a long term hold in Tenaz, formerly Altura, which I added to last year. 52 week high again yesterday, still trading at 1X cash flow once net cash is removed. I own it Because it is an acquisition vehicle buying non Canadian assets so it isn't trading in step with the cdn market.
And some Baytex for clearwater and heavy oil exposure because it is Stupidly cheap too.
All of them are kind of odd balls for entertainment along with return.