RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Long Run vs. Spartan Energywilwal wrote: Here is what the 2014 Annual Report says about Redwater. I don't know why the discrepancy but it is quite significant:
"In the Redwater area, located near Edmonton, Alberta, development is focused on the Viking oil resource play. In 2014, Long Run invested $89.8 million, drilling 44.0 net wells with a 100% success rate. Production averaged 8,142 Boe/d (68% oil and NGLs). No wells are planned to be drilled in the first half of 2015. The Company operates, transports, and processes substantially all of its production within the Redwater area."
Average Production by Area 2014
Redwater Oil 5,369 bbl/d
NGL 204 boe/d
NG 15,411 MCF/d
Total BOEs 8,142 boe/d
If Redwater was sold on the basis of the above, it would not only solve the debt problem, but also the dire working capital deficit too.
Interestingly, they invested $90 million capex into Redwater in 2014, but suddenly no investment in it for the first half of 2015. Sounds to me like it's on the block for sale.
Definitely I would be the first to congratulate management if they are going this direction.
Yes wilwal I agree with you; there is no doubt that Redwater is a very, very valuable piece of real-estate & can easily take care of LRE's debt. Sure makes you wonder how the analysts rate stocks when Spartan Resources has no valuable assets left & is pumping their fields dry.
Accordingly to you wilwal it would take at least 600mil to produce 5,000 to 6,000 BOE/d. Lets look at Spartan (SPE) if they were buy properties & get lucky & double their production from 10,000 BOE/d to 20,000 BOE/d (we'll be very generous - an extra 4,000 BOE/d for the same price) & do some math (no. are approx. for simplicity)
share offering = 700/mil/3.20 sp = 219 million shares
Add this to the already 264,000,000 = 483,000,000 shares
Now multiply this by the share price 3.20 = 1.4 billion dollar market cap. Isn't that amazing a 10,000 BOE/d increase (that is if you are lucky for your 700 mil investment - its still a gamble with no guarantees) & you are a 1.4 billion dollar company. But wait, you haven't even touch an oil well & are only producing 10,000 BOE/d presently with a market cap of 1.4 billion dollars. Boy can the analysts analysis - what a market.
"PAPER LION!"