Kurt Molnar from RJ has it completely wrong This Kurt Molnar analyst from Raymond James either he is very incompetent or he has an agenda and works for the suitor. He claims that:
"He noted that Chinook’s guidance implies that cash netbacks in 2017 will be roughly $6.50 per barrel of oil equivalent (BOE). That is expected to be the lowest among the company’s regional peers, stemming primarily from the high cash costs associated with Chinook’s business model."
The company officially announced in the latest press release that its operating cost in 2017 will be $10/boe or less, which is the lowest operating cost per boe among all the Montney peers.
Moreover, the NEW CKE's cash netback in 2017 will be about C$10/boe, here is why:
Thanks to the two recent asset sales, Working Capital Surplus is C$25 million in March 2017, see the company's press release in February 2017.
The company announced in the latest press release that it will exit 2017 with C$2 million Surplus, so it will spend C$23 million from Surplus.
But CapEx is C$40 million in Q2, Q3 and Q4.
So the remaining C$17 million will be from Operating Cash Flow in Q2, Q3 and Q4.
C$23 million operating cash flow based on average production of 4,200 boepd for 2017 means that cash netback is AT LEAST C$11/boe:
C$11/boe x 4,200 boepd x 365 days = C$16.8 million.