ScotiaBank 2 cents Our view. While debt issues were concerning, the offer implies a long-term C$
oil price of ~$88/bbl in the 1P NAVPS case but $70-75/bbl in the 2P case, in
line with current long-term strip prices of $73/bbl. On a 22 mboe/d current
volumes basis, the deal values LEG at ~$70,000/boe/d and under strip pricing
implies 6.0x 16E EV/DACF (using our 16E assumption of 23.2 mboe/d). In our view,
the implied long-term oil price, and production, reserve, and cash flow metrics
are low compared to recent Saskatchewan-based deals. We think it possible that
shareholders may look to extract more value.