GREY:CEQXF - Post by User
Post by
Methodon Dec 05, 2016 10:24pm
202 Views
Post# 25558144
Big trade today
Big trade todayAlmost 18m shares crossed at Peters today. Based on the size, it suggested that ARC exited. Not clear yet if the other PE sponsors added or a variety of other investors.
Based on the guidance for H1, annualized cash flow looks to be about $22-24m with around $68m in debt. Of course, this is based on AECO of $2.75/GJ vs the current strip at $3/GJ and WTI of US$50 vs the current strip at about US$55.
When I adjust for current prices, I get to annualized cash flow of $30m at the midpoint of the guidance range. On that basis its trading at about 4.4x EV/DACF and P/CF of 2.1x. The gassy names I see trade closer to 6-8x. At 6x, CQE would trade around $0.45 or 73% upside from here. Further, higher than expected prices should mean lower than expected net debt or higher production/cash flow so there is some upside to the calculation.
I'm definitely not an energy expert but I thought it was interesting to go through the numbers since all the brokers I use no longer cover CQE!