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VIRGINIA HILLS OIL CORP VFGGF

"Virginia Hills Oil Corp, formerly Pinecrest Energy Inc was incorporated under the ABCA on March 24, 2006 under the name Testudo Oil & Gas Exploration Ltd. The Company is a Calgary, Alberta-based oil and natural gas exploration, production and development company with operations in the Canadian provinces of Alberta and Saskatchewan."


GREY:VFGGF - Post by User

Comment by ofirmeon Dec 31, 2013 2:19am
253 Views
Post# 22047474

RE:cash flow

RE:cash flowI think $60M is overly conservative. in the assumption of 3,400 bbl/d and netback of $55 you will
 be close to $67M andf that is conservative (in my opinion...). if you assume that waterflooding
 is a disaster (unlike everything else in the area and the first projects...), than you might be right.
The key here is that waterflooding can increase the netback and keep capex low. 
This will become in 2014 all about the free cash flow and not the gross.
If you assume $65M - $40M (capex) - $10M (interest) you get $15M net. if you increase the netback
 and you do not require even $40M capex, the margin goes up to doble that.
Good hedging at $95 could carry them to well over $65 netback and if the normal response 
 happens with the waterflooding, you will have large majority of oil flowing out of there by end of
 2014. 
Anyway, good luck to us and to the company.
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