hmmmOK. So I am kind of tempted to but some of this stock but I looked at the numbers closer:
They say their current production is 660 boepd = assume 60,720 boe for Q3.
They say current split is 60% liquids 40% gas.
So using the production split at $50/bbl for oil and $3.00/mcf for gas = $37.20/boe
With an average royalty rate (off their Q1 and Q2 MD&A of about 16.5% = $6.14/boe
Let's say they are steady at $20.00 per boe for opcosts, including transportation.
Let's say that G&A is now $600K/quarter = $9.88/boe.
The math on the above = $1.18/boe to the good.
A few things to consider: is gas going to actually be that high? Probably not.
Will royalties stay at that level? No. I believe they go higher with the PVR.
Are there some other costs that have not been factored into this? Probably.
In other words, I highly doubt that this company is viable....And even if the positive cash flow holds true, is it enough to drill additional wells? No. Buyers remorse forthcoming....