RE:Colbourne - What a Deal MakerI am a large shareholder at LNV (currently 3.8% of the shares). Based on my models an acquisition of LNV’s float by SGY at $6.47 (effective deal price at $6.07), and if the deal is fully financed with shares (including the chunk bought in the secondary), the combined company will have the following metrics:
Pro-forma Production (bpd):
22.3k bpd (82.9% Oil + liquids) - 39.3% rise in daily production (10.9% accretive per share*)
Pro-forma cash flow:
$321m 31.5% rise in cash flow (4.8% accretive per share)
Pro-forma decline rate:
22.5% (6.3% slow down)
Pro-forma 1P Reserves:
64.16m - 49.2% increase (18.8% accretive per share)
Pro-forma 2P Reserves:
112.3m - 51.1% increase (20.3% accretive per share)
Pro-forma D/CF (including $120m in assumed LNV debt):
1.36 (4.6% increase)
*Shares to be issued:
SGY: 45.8m shares, total shares outstanding after purchase: 224.8m (25.5% dilution)
It is worth noting the above numbers doesn’t include any potential savings form operational synergies, none-core asset sales and expanded/accelerated development of LNV’s assets.
I would be very open and very interested in joining forces with SGY if the deal for the float is indeed done at a price close to where LNV traded in September 2013.
Regards,
Nawar