WATERFLOOD operations start in H2 2012 CLT was sold for 100,000 $/boepd today despite the facts that CLT is very very gassy (80% gas) , a market cap/FFO= 25 (!!!!!) and that it has a long term debt/FFO annualized = 3 !!!!!
SCS trade for 60,000 $/boepd (80% oil), with a market cap just only 1,5x its FFO annualized with a long term debt/FFO= 2,2 ! Crazy.
Let's see some other facts:
The company said some interesting things at the latest OUTLOOK of Q2 report for the attentive investors:
1) They said that they would inititate their first waterflood in H2 2012. A waterflood will increase the oil production by 80% (average). There are many cases when the oil production rose 120-140% after waterflood but I take the average.
2) The company can grow within a Funds from operations budget.
3) The costs will be significantly reduced in Q4 2012 after the recent upgrades in the pipelines and the electrification of their land. This means even higher netback per boepd.
4) One rig is coming in Q4 2012 and TWO rigs are coming in 2013.
4) Edmonton has exceeded WTI since August for 2-3 $ every single day ! Compare this with the fact that Edmonton was lagging WTI in Q1 and Q2.
5) The latest article in Yahoo headlines (SCSZF ticker) is very enlightening.