OTCPK:BLKPF - Post by User
Post by
eebleron Nov 10, 2011 3:04pm
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Post# 19227395
ScotiaMcleod Commentary and Financing
ScotiaMcleod Commentary and FinancingScotiaMcleod was pleased with the results and used the pun "Full Steam Ahead" in their summary. They have a 12-month target of $7.50 so while not superb, still better than current. A couple of their higher-level comments were:
Steaming has gone well at Blackrod with in-line rates of 200+ bbl/d & peak rates expected (in 6-12 months) at 500-800 bbl/d with target steam oil ratios in the 3-3.5 range. We believe these rates should be achievable given offset analogs & could be greater given the high quality reservoir. Other positives include its Mooney property where the ASP flood is proceeding (response could be as early as Q1/12) and its Onion Lake property where approval for a 12 mboe/d thermal project is expected in Q1/12.
2012 guidance below expectations. Volumes are to avg. 11 mboe/d with an exit of 12.5 mboe/d on capex of $130M. We were at 12.1 mboe/d on higher capex of $150M. Some of the conservatism we believe surrounds ASP timing as PXX only counts 1.7 mbbl/d in the avg. & the upper range is ~4 mbbl/d. As we anticipate a 10 mbbl/d SAGD project will likely commence in late 2012, we see higher capex & expect a financing in 2H/2012 (combination of equity & debt).
Southern Pacific Resources could be a comparable in terms of the their capex requirements for a 12,000 boe/d SAGD project. They did theirs through a combination of debt and equity. The capex was/is budgeted for about $450m and it looks like actual costs will come in around $420m. A reasonable chunk of that was to build infrastructure but presumably PXX is no better off in terms of road access, pads, buildings, etc. needed to set up the footprint. If the share price can get a break from all the crap going on out in the world, then maybe 50m shares and $200m in debt would do the trick. Its a long way off, but for anyone that doesn't like getting trapped in a stock when there is a big financing going on, you'll want to pay attention to any indications of a pending financing as the timeframe gets closer.
It was nice to see that they intend to submit the application for Blackrod for the full 80,000 boe/d instead of piece-mealing it in at 40,000 boe/d.
Overall, PXX continues on track for >80k boe/d potential.
glta
eebler