BXE compared to NAL David Pescod T: 780.408.1750 Debbie Lewis T: 780.408.1748 Toll Free: 1.877.409.1750 Page 2
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BELLATRIX EXPLORATION (T-BXE) $5.40 +0.07
With oil trading at $100 you would think we would be having more
fun in the oil markets...we are not. It has been far from generous, and
instead you hear more worries about gas companies, particularly
those with no liquids at all, given the incredibly weak natural gas
prices and the financial problems they may be facing.
Anyway, one story that continues to attract rumors as a potential
takeover candidate is Bellatrix Exploration...mind you those rumors
have been going on for quite awhile now.
Nevertheless, analyst Brian Kristjansen, takes a look at Bellatrix,
given the Pengrowth acquisition of NAL energy for $1.9 billion, Kristjansen
writes “ The transaction metrics further underscore our belief
that Bellatrix is undervalued.
Both companies are gas-weighted intermediates moving to
greater liquids with an emphasis on Cardium oil (Bellatrix has exposure
to 110 net sections of Cardium rights; NAL has 182 net sections).
And both have significant production from central Alberta.
Applying the acquisition metrics Pengrowth paid for NAL —
$67,000 per BOE/d and $18.20 per BOE of 2P reserves — implies that
Bellatrix should trade at $9.11 using today’s field estimated production
of 18,000 BOD/d or $9.30 using the company’s recently reported
December 31, 2011 reserves; both are steep discounts of 41.5% and
42.7%, respectively, to the prior close.
A criticism of this comparison would be that NAL is oilier,
weighted 47% to oil versus Bellatrix at 38%, but if we were to assume
a 100:1 heating equivalency ratio, this would imply an NAL valuation
metric of $129,000 per adjusted BOE/d, or a comparable Bellatrix
value of $7.24, again implying a deep discount. Using the same adjustment
to discount reserves would still yield a $6.96 share price.”
We also note Duvernay results are expected this week.
from: https://www.investorvillage.com/groups.asp?mb=17397&mn=4301&pt=msg&mid=11587711