Chinook Energy Inc. Common CNKEF

The truth about CKE & Raymond James who touts indebted DEE

[George98]

He must have an agenda because:

We have an "analyst" who disregards CKE's latest guidance for operating cost in 2017 of $10/boe or less, while the other Montney producers have operating costs including transportation and interest expenses above $11/boe. Value Digger in his latest article put links from KEL, NVA, LXE whose costs are from $11 to $16 per boe.

We have an "analyst" who disregards 4 key metrics that have been used in ALL the energy deals to-date such as production metric, reserves metric, $/acre metric and EV/EBITDA metric.

We have an "analyst" who disregards that CKE has the lowest 4 key metrics with a huge gap versus the peers.

We have an "analyst" who disregards that CKE has the cheapest wells in the Montney space of just $3.7 million while the vast majority of the Montney wells cost above $5.5 million.

We have an "analyst" who disregards that CKE is DEBT-FREE and its management has always been very conservative and has always been beating the original guidance at the end of the day.

We have an "analyst" who tries to discredit CKE by arbitrarily setting a clueless cash netback figure that can't be justified by any financial model, proven author Value Digger and any other analyst who follows CKE.

And we have an analyst who at the same time touts heavily indebted DEE (its leverage is 3 times!) which has the most expensive Montney wells (along with CQE) in the Montney space. Having the most expensive wells is a very problematic situation for a junior producer like DEE with limited liquidity and a debt overhang. It can even lead to bankruptcy. DEE's wells now cost more than $7 million! All the market participants know that the wells at Bigstone and Simonette areas are the most expensive Montney wells and this "analyst" ignores the basics. I quote from DEE:

In 2016, the Company continued the trend of reducing drill and completion costs for its horizontal Montney wells at Bigstone reporting a record low gross average of $7.5 million per well compared to $8.1 million per well in 2015, and $10.4 million in 2014.