someone can explain ?Hi,
i'm not familiar with CLL since i try to avoid company that has important debt like connacher. But when you see 30 MM share volume in 2 days, you have to make rethink and make some calculation again to make sure you didn't miss something... I read the news about the dilutent and the increase in production and the hedging of most production between 90-105 $/BBL. I made some calculation and on short term, i'm not sure what to think of it. If i understand correctly, the SAGD+ is going to increase well production by 30 % and their expect to reduce the amount necessary from 25 % to 20 % if i also read correctly. I made some calculation based on these assumption for 1 YR and being really optimistic by taken into account that all wells are using this process :
|
|
Q1 |
Forecast |
|
|
|
|
prod |
12500 |
16250 |
30% more prod |
|
|
Price |
95 |
95 |
(hedged) |
|
|
|
YR CF |
433 437 500 |
563 468 750 |
|
|
|
|
blend cost |
147 892 000 |
140 849 524 |
reduction of 5 % on blend cost |
|
opex |
89 404 000 |
89 404 000 |
same |
|
|
|
transport |
92 984 000 |
92 984 000 |
didn'T bother to put an increase |
|
|
|
capex |
80 000 000 |
80 000 000 |
same |
|
|
|
OPER CF |
23 157 500 |
160 231 226 |
sorry should have put that before capex xD |
|
|
|
interest |
154 744 000 |
154 744 000 |
|
|
|
|
Free CF |
(131 586 500) |
5 487 226 |
|
|
|
I see that if everything happen like they hope, it will at least make CLL sustainable at this level of debt but won't be able to reduce debt due to their low netback even with the new process.
The big interest seems to be the NAV which the market doesn't really take into account and i suppose i wouldn't too because if you began to look at those Future cost developpement to get those 2P reserve (average of 353 MM$ per year from 2014 to 2017) you began to wonder were connacher will take the money since with the new info, they won't be able to get much more than 80-100 MM$ capex a year. (i know the calculation is a little messy, and doesn't take into account a lot of thing, just wanted to make a quick calculation). since the nav seems doubtfull, i've taken a multiple of CF to help me evaluate CLL. With the actual nebt debt near of 750 MM$, it gives me a EV of about 800 MM$ (ap. mkt cap of 50 MM$ on closing) on the DACF above of approximatly 85 MM$ (Oper CF + capex - interest (capex shouldn't have been include in oper CF (my mystake)) this gives a multiple of about 9.5x. so from my point of view, doesn't really seems undervaluated even with the news realased (would even say it's being overevaluated at this multiple)... didn't took the time to make a assets evaluation cuz i don't really have a good enough understanding of the CLL assets to priced them so maybe that could be the big upside i'm missing, but at this point, i'm clueless...
So after all that i have a few question if anyone has answer ;
what's with the big comotion with this stock ? is there a important upside that i don't see ? is it just another of those market over reaction ?
All your input would be greatly appreciated....
thx