Chinook Energy Inc. Common CNKEF

RE:New CKE (MONTNEY): Plant + 19 MMboe + 5,400 boepd = C$90 m

[George98]

auburn, please stop promoting in a slyly way VLE in highly risky Turkey where there is huge political uncertainty and geopolitical risk and Erdogan's government and dictatorship can change at any time. 

George98 wrote:

Based on the latest guidance with the spin-off now being behind us, CKE will produce 5,400 boepd (20% oil and liquids) from its Montney properties in March 2017 (exit production). See the new presentation and latest news.

 

Value Digger from Seeking Alpha estimates in his latest article that CKE's 2P Reserves from the Montney assets (Birley/Umbach and Knopcik/Gold Creek) will be at least 19 MMboe (25% oil and liquids) in December 2016. They were 18.3 MMboe in December 2015 (see the June press release when the spin-off was announced). The independent reserves report will be out by February 2017.

 

Now at C$0.45 per share with the spin-off completed, CKE's Enterprise Value at C$0.45 per share  is just C$90 million, given that CKE will have a working capital surplus of C$5 million in March 2017 (see latest guidance). 

 

So this Enterprise Value translates into C$16,666/boepd and C$4.7 per boe of 2P.

 

And CKE has ZERO DEBT too.

And CKE also has its own pipeline infrastructure and gas plant of 25 mmcf/d while Blackbird (BBI), Leucrotta (LXE), Front Range (FRK), Questerre (QEC) and other Montney producers don't have their own plants or have smaller ones.

 

And the healthy Montney peers currently trade above C$50,000/boepd and C$7 per boe.

 

And the Montney deals with healthy producers (not distressed sellers) materialize for C$70,000/boepd and C$10 per boe.

 

So I do expect a triple digit return from the current price level.