GREY:CNKEF - Post by User
Post by
George98on Apr 05, 2017 3:06am
299 Views
Post# 26077580
LXE at $15.9/boe (81% Gas), NEW CKE at $2.1/boe (83% Gas)
LXE at $15.9/boe (81% Gas), NEW CKE at $2.1/boe (83% Gas)Investors got another reality check today from another heavily promoted Montney producer, LXE. LXE will spend all its cash this year and finish the year with debt!
LXE released production and reserves report yesterday. LXE has 22.7 mmboe reserves with 81% natural gas, production is 3,000 boepd with 75% natural gas!
As a reminder, the NEW CKE has 27 mmboe with 83% natural gas and will remain debt-free by December 2017 with production of 6,300 boepd.
LXE is obviously a natural gas weighted Montney play as expected and at the end of the day it's clear to the most novice investor that LXE's reserves and production are not as oily as many (including so-called "analysts") have been desperately trying to present them during the last 12 months.
Just a reality check for the heavily touted and irrationally promoted Lower Montney turbidite which is a very natural gas weighted formation.
LXE's current EV is C$360 million, so LXE trades C$15.9 per boe although it's 81% natural gas!
LXE also trades 2.4 times its NPV10!
The NEW CKE has current EV of only C$55 million, so it trades only C$2.1 per boe and only 0.43 times its NPV10!
LXE also trades C$3,100 per Montney acre while the NEW CKE trades at only C$1,100 per Montney acre.
On top of that, LXE's operating cost per boe is C$15/boe while the NEW CKE has officially announced that its operating cost after spinning off Craft will be just C$10/boe.
Again, LXE's production and reserves are clearly as natural gas weighted as CKE's ones. The Lower Turbidite Myth about a supposedly heavily liquids formation with a lot of condensate has been debunked, LXE's reserves were out today.
Both firms will spend cash to grow their production by year end.
And actually, LXE announced it will have DEBT by year end!
Some supposedly concerned shareholders are concerned about CKE which will spend cash to grow its production by 120% (!!!) this year but they are not concerned about LXE which will spend all its cash and will load debt to grow its production by much less than 120%.
Well, LXE is not for me. LXE is the next Montney bubble like BBI. It's all yours, you can keep it because I buy low and sell high, not the opposite.