GREY:LSTMF - Post by User
Post by
nlr2on Jun 13, 2014 2:59am
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Post# 22656415
Arcan
ArcanWith the asset sales underway for East Pembina and part of Southern Saskatchewan it appears that Lightstream is high grading its existing focus areas. If the two sales were able to net between 400-500 million, which seems reasonable given 5000 boe/d of mostly oil, undeveloped land and infrastructure at 80,000- 100,000 per flowing BOE/D, I think it would make sense for LTS to make a move on Arcan. With the share price of LTS strengthening they could acquire the equity portion that they don't control of Arcan for 8 million- 10 million shares. So dilution of 4-5%. The debt portion would be paid using part of the space that the asset sales clears up.
The deal would be beneficial as it would add 3800 boe/d of mature, partially waterflooded production and more importantly 150-200 million worth of infrastructure to support Swan Hills being the third key area for the company. Post all three transactions the company breakdown would be:
SE Sask- 15,000 BOE/D
Cardium- 20,000 BOE/D
Swan Hills- 7,800 BOE/D
2 Billion or less in debt with cashflow of around 600 million.
The best part is that LTS has been able to achieve record well results in the Swan Hills. Since the farm in agreement Arcan has also been able to achieve comparable results. So clearly there has been some sort of completion break through. This indicates that with infrastructure in place Swan Hills could be rapidly grown.
This is all just speculation obviously. Just curious what LTS shareholders would think of a deal like this. Lightstream appears to be a bit light on land if they really want Swan Hills to be their next focus area and Arcan could fix this.
Thoughts?