New Valuation For RMP
Thanks to whoever sold me 5,000 RMP at $5.77 today. Geez, and to think I was disappointed earlier to miss getting more at $5.85.
In any event, looking at the results, nothing stellar, but pretty solid. Yes, the debt went up, but the way I read it, cash fllow for the year will be about $72M. I base this on the $59M to end of Q3. Then I am adding $13M as an estimate for Q4. While volumes continue to increase, the price of oil has declined more.
I estimate the overall debt at $124M at the end of February. This assumes that all the pipeline costs are booked by then. Assuming no more land purchases, I expect their cashflow to exceed their capital spend in Jan./Feb., but I am going to ignore this in my model for now.
Based on current reduced oil prices, as of the end of February, I value RMP at $7.49/share. This includes reduction in estimated NPV for risked 1) Waskhigan wells to $3.7M, and 2) Ante Creek Wells to $9.5M. The pipeline needs to be up and running and the company flowing 9,300 boepd to get to this valuation. WTI needs to hold at current levels, and the spread between WTI and sweet at the Edmonton terminal needs to get a couple bucks better. I am assuming it will. Note that I am ignoring the potential of the Coquina.
So is RMP still a good deal at $5.80? Most certainly, in my humble opinion.
Larsen6