VIRGINIA HILLS OIL CORP VFGGF

Spyglass sale of Red Earth assets

[sellthefarm]

Splyglass announced this morning that they received $12.3m for  Red Earth assets which were producing 210boe/d (100% liquids).  Thats $58k per boe.  The same metric applied to PRY current boe/d is ~$110m.  Does anyone know where Spyglass assets are in relation to PRY and if they are of the same production type?  

The Spyglass assets had 0.4MMboe of proved developed producing reserves and total proved reserves of .8MMboe and proved plus probably of 1.4MMboe.  That's $30.8K of proved developed producing reserves, $15.4k of total proved and $8.8k for proved plus probable.  

Just looking quickly it appears PRY has:
1) developed producing reserves of 4.8MMboe x $30.8k = $148m,
2) total proved reserves of 6.8MMboe x $15.4k = $104m and
3) 2P reserves of 11.6MM x $8.8k = $102m.  

Best case they got $148m less $110m of debt = $38m for equity holders plus $20m value for the tax assets ($400m worth of assets which are probably worth 5% of total value or $20m in the worst case).  Thats $38m + $20m for shareholders divided by 222m diluted shares = $0.26.share.  Most llikely case is they get between $100m and $110m for all of their assets plus $20m for tax assets less $110m of debt = $0.05 to $0.09/share to common equity holders.

Any thoughts? Or do the buyers just let them go broke and pick up the assets through the lender for even cheaper?

[kingfisher7]

It's difficult to use the Spyglass metric as a value for Pinecrest.A perfect example was the sale of Surge in 2011 for $ 83 000 per BOE and Renegade 2012 for $ 220 000 per BOE both players in the Red Earth oil formation. PRY is second behind Penn West in land holdings with 176 210 net acres worth today between $ 1200 and $ 1500 an acre which gives a value between 211 million & 264 million

[sellthefarm]

Thanks

[Fullblast]

So kingfisher, using your metric which you think is better, what would be the value for shareholders : 180m + 87 - 110m (debt) = 157/222m (diluted shares) = 0.7/ share ?

[Catalac]

70 cents would be a home run, lol. Two bits today, shocking that that makes the market value 7 mill, nutty. I might have to buy some just as a speculator.