RE: RE: RE: RE: RE: RE: RE: RE: RE: RE: Stockchase
The error on the shares outstanding for PPY is a relatively minor comment given the more important aspects of my post, and the other number were taken from the Q3 report. PPY should do well this coming year as they invest the recently raised cash and also likely start to leverage debt. What is your sense on their risks should gas prices or oil prices drop? I don't see their shale gas economics being highly favorable in the near term. Investors to me have fully priced in a lot of the upside, but have not discounted the non-technical risks as much. Investors seem to be assuming their will be a takeover by a major or foreign, as happened with Daylight. I would not expect a huge premium to be offered to the current trading price, perhaps 20% in my opinion is still on the table.
I didn't mention that WFE reserves are not updated for this year, so to compared P+P they had 14M boe at year end, and I would expect that number to be higher owing to the significant drilling this year. Orion acquisition adds another 23.5M boe. There is some good upside on the NAV calculation so WFE should have another 10% upside (or more) based on this parameter. Investors have not seen the potential for a major or foreign national to consolidate a strong position in the Viking, and easily there is 100,000 boepd for someone to grab at a relatively good price if they moved quickly. I would expect WFE would attract an offer in the $10/sh range if someone was serious about buying them up in a friendly, which is pretty much the only option for them.