Chinook Energy Inc. Common CNKEF

Transformation continues, Gas Handling Deal, ALL Tournament

[George98]

Consolidated balance sheets are not easy for the inexperienced investors to figure out. So:

1) In early Q3, CKE made a NEW Gas handling agreement for its Montney production in Birley which improves further costs, drilling economics and pricing. Significant development.


2) ALL the Tournament shares will be distributed to CKE shareholders. Another  significant development. So by buying CKE now at $0.51  you get:

- 70% of Tournament whose estimated enterprise value is about $200 million based on its 5,041 boepd production capacity and its 21.26 MMboe 2P Reserves. See CKE news as of June 2016.

AND

- CKE, as a pure Montney producer now with 2,700 boepd from Montney and 18.3 MMboe of 2P Montney  reserves. See CKE news as of June 2016.


3) Pro forma the Tournament deal, CKE's provisions are now just $32 million and Tournament has the remaining $80 million provisions.



4) CKE has an eviable balance sheet and is debt free with $21 million net surplus and about $25 million cash.


5) Tournament has about $3 million cash and just $18 million debt.


6) To estimate CKE value ONLY for its Montney production and 2P Montney reserves ALONE, bear in mind the key metrics for the other  Montney juniors that are also DEBT FREE, same like CKE, and drill next to CKE:

Blackbird (BBI) trades now at about $100,000 per boepd and $20 per boe of 2P reserves.

Leucrotta (LXE) trades now at about $100,000 per boepd and $16 per boe of 2P reserves.

Riverstone Seneca  paid $80,000 per boepd for privately held CIOC that drills next to CKE in Gold Creek in January 2016.