Chinook Energy Inc. Common CNKEF

RE:Add another C$9 million Gain in Q1 2017

[George98]

Miner1967 wrote:

Aside the profits shown in Q4 2016 (the company's net income was positive while most energy producers lost money in Q4 including its Montney peers LXE, SRX, BIR, CQE and heavily indebted DEE), CKE will also report another approximate C$9 million profit in the first FULLY unconsolidated report of Q1 2017.

 

This is reason I believe the "Value Digger" author from SA has repeatedly said that looking at the consolidated reports that include the Craft assets are highly misleading and is a backward-looking approach. 

 

Specifically, the NEW CKE's assets held for sale (Gold Creek Montney and Pipestone Montney) were sold for C$18 million in Q1 2017 but their carrying value was about C$8 million in December 2016.

 

From the annual report:

 

 

" 10. Assets Held for Sale 

 

During December 2016, Chinook entered into two agreements to sell certain of its petroleum and natural gas properties and undeveloped lands located in the Knopcik/Pipestone and East Gold Creek areas of northwestern Alberta for total net proceeds of $18.0 million before customary adjustments. At December 31, 2016, these properties were classified as held for sale as it was highly probable that their carrying values would be received through a sales transaction rather than through continued use. These transactions closed on January 20, 2017 and February 1, 2017, respectively. 

The combined net carrying values of $7.2 million were reclassified from D&P Assets and E&E Assets to assets held for sale and the associated decommissioning obligations of $0.2 million were reclassified from provisions to liabilities held for sale on the consolidated statements of financial position."

 

great catch, miner. This will further stockholder equity.