George98 wrote:One of the best articles about the Montney producers recently detailed on the operating costs per boe. Value Digger, the author, summarized facts from the companies' reports and DEE's operating cost at C$16 is very high. One of the reasons is the interest expenses due to the debt overhang.
Also, DEE's Montney wells are very expensive costing about C$8 million each, which doesn't bode well for a junior player.
NVA and LXE are high cost operators too with cost per boe being at C$15.
KEL is also another high cost Montney producer with its operating cost being at C$13.5 per boe.
Meanwhile, the new Chinook (CKE) officially announced today that its operating cost per boe will be C$10 per boe or less at its large contiguous Montney acreage in Birley/Umbach and confirmed Value Digger's forecast. So the new CKE is one of the lowest cost operators in the Montney trend.
I quote from his article:
Specifically, I project that the new Chinook Energy's operating cost in Birley/Umbach will be about C$10/boe in 2017, which is in line with the operating cost (including the interest expenses) for the majority of the Montney producers that ranges from C$8/boe to C$12/boe, according to their reports.
For reference, Storm Resources (OTC:SRMLF) is a leveraged Montney producer and Storm's operating cost (production, transportation and interest expenses) is C$8/boe, as shown here.
Also, Birchcliff Energy (OTCPK:BIREF) is said to be a low cost operator in the Montney play. Specifically, Birchcliff's operating cost is above C$7/boe. However, Birchchliff Energy is a highly leveraged Montney producer and this is one of the key reasons why I avoid its risky stock. As a result of the high interest expenses, Birchcliff's total operating cost is almost C$9/boe, as shown here.
Additionally, Kelt Exploration (OTC:KELTF) is another leveraged Montney producer whose operating cost (production, transportation and interest expenses) is C$13.5/boe, as shown here and here.
NuVista Energy (OTC:NUVSF) is another leveraged Montney producer whose operating cost (production, transportation and interest expenses) is C$15/boe, as shown here and here.
Moreover, Delphi Energy (OTCPK:DPGYF) is another leveraged Montney producer whose operating cost is C$16/boe (production, transportation and interest expenses), as shown here.
And as a reminder, Leucrotta Exploration's operating cost was as high asC$15/boe (production and transportation) in Q3 2016.
After all, when it comes to the Montney properties, IRR and liquids component of the Montney wells, surrounding infrastructure (i.e. compressor station, 100% ownership and operatorship, gathering pipelines) and operating costs, the new Chinook Energy has nothing short of Birchcliff Energy and Storm Resources. Actually, based on the facts above, I could say that the new Chinook Energy is Birchcliff Energy or Storm Resources WITHOUT their debt overhang.
The full article is here:
Seeking Alpha ARTICLE about The Montney Producers including DEE