Post by
nozzpack on May 30, 2022 4:48pm
Quick Scoping of Near Term Fair Value
Based on Q1 production metrics....
1919 Boepd resulting in $2.2 million in fund flows.
After completion of 3 Gwinville wells which will add 3000 boepd of new production ,production is forecast to average just over 4500 boepd.
Assuming no increases in Oil and natty gas prices since Q1....both have risen substantially since then...we have $2,2 million times 4500 / 1919 = 2.6 times $2,2 million = $5.5 million in fund flows per quarter times 4 Quarters = $22 million in Fund flows .
This amounts to about $0.26 per share .
Energy stocks are now trading at high cash flow multiple , with 10 times being on the lower part of the range.
This would place fair value subsequent to the 3 Gwinville Horiziontals coming online at forecast production rates of 10 times cash flows which amounts to a fair value of $2,60 per share.
Cash flows from these three wells will then enable another three to four wells to be drilled boosting production to the 7000 boepd at exit 2022.
Hence, the reality of the analysts call of a $3 share price at exit 2022..
Comment by
Mickey2 on May 30, 2022 4:57pm
can you tell me where you got this --->"After completion of 3 Gwinville wells which will add 3000 boepd of new production ,production is forecast to average just over 4500 boepd" there has been no update on the 3 Gwinville wells yet
Comment by
nozzpack on May 30, 2022 5:06pm
These numbers were derived from their corporate presentation. The numbers are in USD, so to convert to CAD, multiply by 1.27..
Comment by
Mickey2 on May 30, 2022 5:16pm
there are no flow results yet from the Gwinville wells...There is no way those are provided in their corporate presentation. let me look to see where you got this.
Comment by
Mickey2 on May 30, 2022 5:19pm
well bloody hell, you are right..i found it in the corp presentation. thanks nozzpack.