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RMP ENERGY INC T.RMP

"Iron Bridge Resources Inc, formerly RMP Energy Inc is a crude oil and natural gas company engaged in the exploration for, development and production of natural gas, crude oil and natural gas liquids in Western Canada."


TSX:RMP - Post by User

Comment by profittaker1on Mar 05, 2017 2:52am
283 Views
Post# 25933161

RE:CKE Becoming Analyst Darling?

RE:CKE Becoming Analyst Darling?
ValueDigger, the "analyst" you speak of, has been long CKE since early October when Chinook was over 55 cents per share. He has written 4 articles total since then: 10/05/2016, 10/17/2016, 11/26/2016 and yesterday. The funny thing is that he continues to repeat the exact same reasoning for Chinook being undervalued in every article (production metrics and reserves). The issue is that a barrel of oil and a BOE of natural gas are assumed equal when judging relative value but really a barrel of actual oil or condensate is worth roughly 2.5 times as much as natural gas. Chinook appears to have relatively dry gas (around 30 bbls/mmcf) which leads to low IRRs and longer periods of time to get back the cost of drilling. The wells may not be economic at all with AECO flirting with $2 but they are hedged at a higher price short term. RMP is drilling in search of higher bbls/mmcf wells at Gold Creek which completely changes the economics. If RMP hits some wells around 75-100 bbls/mmcf, there will clearly be a stronger premium attached to RMP as the price of oil and condensate are much more attractive at current prices (including to majors looking for takeout candidates). Peers such as LXE, DEE and BBI have much better well economics than Chinook as a result of their liquids rich wells. RMP could join that group soon if the Gold Creek wells are good. That would mean a substantial rise in share price to trade at a similar valuation. I would only buy CKE when I feel bullish on nat gas again and next winter is a long way off.
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