Energy Summary Excerpt Posted yesterday by Carswell @ IV
Alberta Montney producer RMP Energy Inc. (RMP) lost four cents to 70 cents on 640,700 shares. It has officially finished its "strategic review," the euphemism it used in August when it put itself and its assets up for sale. It was under pressure at the time to do something about its burdensome net debt of about $105-million. In late October, it agreed to sell its Ante Creek Montney assets, which were contributing over half of its production, to Enerplus Corp. (ERF: $9.89). This $114.3-million sale closed yesterday and brought the strategic review to a close.
Yesterday also brought a presentation from John Ferguson, RMP's president and chief executive officer, who talked up the new, Ante Creek-less business plan at GMP FirstEnergy's Energy Growth Conference in Toronto. Mr. Ferguson said RMP now has $5-million cash, no bank debt, a $40-million credit facility and production of 3,200 to 3,300 barrels of oil equivalent a day. That production comes from its "bread-and-butter" Waskahigan light oil assets and its low-decline Kaybob gas assets. RMP's goal, said Mr. Ferguson, is to maintain that base production while turning its early-stage Gold Creek assets into a "major resource area." So far, RMP has drilled just one well at Gold Creek, but it liked the results. More active drillers in the area include the private Canadian International Oil Corp. (CIOC). Largely because of CIOC, a mid-stream company called Meritage is working to double the capacity of its plant in the area to 150 million cubic feet a day, said Mr. Ferguson. The plant is currently handling only 60 million cubic feet a day, he added, giving a sense of Meritage's optimism about the area. RMP will be working with Meritage to build the infrastructure needed to bring its own Gold Creek assets on production. The goal is to get that done early in the second quarter of 2017. Meanwhile, RMP plans to spud one Gold Creek well next month, another in the first quarter of 2017 and another in the second quarter. Mr. Ferguson declined to predict when or how much the wells would produce, because infrastructure construction is weather-dependent. All he would say is that RMP is "very excited. Investors, however, do not seem to share his enthusiasm. Although the 70-cent stock has risen from 62 cents over the last week, it is still down from its pre-Ante Creek-announcement level of 90 cents, not to mention its mid-2014 high of $10.