Conference PresentationMissed the first few minutes. Abby flew through the stuff, but for anyone new to the BNK story - I'm sure they are thinking - 'This thing can't miss"
My take away - looks like they want to use the thermal pilot to help them leverage a higher buyout price. He indicated that they would be steaming in Q4 this year. He didn't say whether they were going CSS or SAGD - but if SAGD, that would mean first production in Q1 2011. Once they have results - then they would look to JV or be sold. That seems to be the only unknown with the company from my perspective - and even at $10 unit price - I think the thermal is all upside.
Without thermal - they show ~25k bbl per day exit rate for 2011. At 80 Brent they are making $28+ Netback on new oil, and most of the 25Kbbls/day would be new oil. I think $80 is conservative at this point (that why I love these guys). They don't even show the $90 Netback case, but looks like it would be $34+.
At $80. $25/bbl*25K bopd*365 = $228M netback exit rate 2011, 250M shares = 91 cents per share. They show 25% growth going forward from that point. So even with a P/E of 20 *91 cents = $18.2 at YE 2011. This is without any buyout, or any thermal recovery proven. I want to listen to the replay but I think I heard him suggest that if thermal is proven then ~1B BOE recoverable - this from a guy that has been conservative in every thing he has said so far. I think I must have heard that wrong.
Now that the presentation is over and reserves are released and there isn't much expected for a few months, it'll have to be digested, and wouldn't be surprised to see the speculators and traders move this back some, but for any serious money out there, I think they will try to get as much as they can at this price very soon.
To me this was a presentation that said, "We are not desperate to sell and if you wait until 2011 to try and buy us, the price could be 3-5X what it is today once our thermal pilot is proven". If it is a major O&G company, then I think they'll wait until thermal boosts the 2P. For private money - they'd probably try to move in this year and assume the risk on the thermal (I don't really believe the risk is very high).
I believe that, before Q2 2011 is over (and maybe much sooner) there will be guys bragging about how they got into Bankers at only $8.