The new Chinook Energy: Proved Reserves NPV-10 alone is $66mIncluding the cash from the two recent asset sales in Pipestone and Gold Creek, the new CKE proforma the Craft spinoff had Zero Debt and working capital surplus of $25 million and about $26 million cash in March 2017, as officially announced in a recent press release.
So the NEW CKE's Enterprise Value at $0.40 per share is $60 million, which is ridiculous because:
Proved reserves NPV-10 alone is $66 million.
Proved and Probable NPV-10 is $128 million.
NAV NPV-10 is $192 million.
and 6,300 boepd in Dec 2017, see guidance, 110% production growth from 3,000 boepd in Dec 2016.
and now trading at just 4 times the estimated annual cash flow for 2017.
See now Leucrotta (LXE) which has also 75% - 81% natural gas and compare the metrics.
In addition, the new CKE will increase significantly all these reserves figures this year because the NEW CKE drills another 4 Montney wells in Birley this quarter (Q2), so it will book additional reserves on a portion of its lands.
Based on 4 wells this year, the new CKE will book additional reserves for about 16 wells, roughly speaking.
According also to the reserves report, it has booked reserves at ONLY 15% of its Montney acreage in Birley/Umbach.
This acreage in Birley/Umbach does not include its Montney acreage in Martin Creek (11,500 net acres) that was quietly acquired in 2016 and was revealed first time in the annual report. The annual report was the first time when the company talked about this Montney expansion in Martin Creek area. It has not published any press release about its Montney purchases in Martin Creek in 2016. In contrast, BBI publishes a new press release anytime it buys some sections, it has published 4 press releases in 2016 alone talking exclusively about land purchases.
The new CKE is not a highly levered play to trade under its Proved NPV-10 !!! Actually, it's debt free. Just few bankrupt plays trade under their Proved NPV-10, not even all of them.
So at $0.40 per share, value investors realize that the new CKE offers a tremendous margin of safety.
Unfortunately the company has not marketed itself at all unlike BBI, LXE, PPY who have participated in several energy conferences over the last couple of years. BBI was in New York last week for one more time. PPY was in London a few weeks ago. CKE has not attended one single energy conference since 2014 and has not spread the word yet.
Don't also overlook that the latest 3 Montney wells were so prolific (all were above 1,100 boepd) that the company had to restrict their flow rates because its compressor was filled to capacity. See Slide 9, new presentation.
They rush now to expand the capacity from 25 Mmcf/d to 50 Mmcf/d to accomodate the extra production from the 3 recent wells along with the new production from the 4 ones that are currently drilled.