Longview Oil Corp LGVWF

RE:RE:RE:Going hostile

[Nawaralsaadi]

Correction, the increase in the dividend would be 16% for SGY and 32% for TOG follows is the full calculation:

Projections for SGY and TOG for 2014:

Production (bpd):
SGY: 16K (84% Oil + Liquids)
TOG: 10K (85% Oil + Liquids)

Cash flow:
SGY: $244m
TOG: $165m

Decline Rate:
SGY: 24%
TOG: 25%

2P Reserves:
SGY: 74.3m
TOG: 40.3m

D/CF:
SGY: 1.3
TOG: 0.9
 
Dividend per share:
 
SGY: 54c per share
TOG: 54c per share

EV/CF 2014:
SGY: 5.75
TOG: 6.6

An acquisition of LNV for either of those companies will be very material, follows is the impact on each metric if either company acquired LNV for 5.5 EV/CF-2014 ($6.47 per share):

Pro-forma Production (bpd):
SGY-LNV: 22.3k (82.9% Oil + liquids) - 39.3% rise in daily production (14% accretive per share*)
TOG-LNV: 16.3K (82.8% Oil + liquids) - 63% rise in daily production (30% accretive per share*)

Pro-forma cash flow:
SGY+LNV: $321m (31.5% rise in cash flow) (8% accretive per share)
TOG+LNV: $242m (46.6% rise in cash flow) (17.3% accretive per share)

Pro-forma decline rate:
SGY+LNV: 22.5% (6.3% slow down)
TOG+LNV: 22.5% (10% slow down)

Pro-forma 2P Reserves:
SGY+LNV: 112.3m (51.1% increase) (23.85% accretive per share)
TOG+LNV: 78.3m (94.3% increase) (55.4% accretive per share)
 
Pro-forma dividend per share (based on an additional $20m in free cash flow):
 
SGY: 63.1c (16.8% increase)
TOG: 71.5c (32.4% increase)

Pro-forma D/CF (assuming 19.8% for LNV (offering shares) paid in debt + $120m in assumed LNV debt):
SGY-LNV: 1.48
TOG+LNV: 1.28

*Shares to be issued to acquire 80.2% of LNV at 5.5 EV/DACF ($6.47 per share):

SGY: 39.19m shares (22% dilution)
TOG: 22.81m shares (25% dilution)
 
The above numbers are adjusted for TOG basic share count (prior numbers were calculated using the fully diluted numbers). I have also added the expected increase in the dividend based on expected 2014 free cash flow numbers.

Regards,
Nawar