RE:RE:Bouquets, CKE Montney wells have Condensate at 30 bbls/MMcfit was great talking to you, bouquets! As you see, the slight difference, if any, between SRX's and CKE's results is more than offset by CKE's lower cost per Montney well and the fact that SRX has a significant amount of debt (SRX leverage is about 1.6 times) while CKE is debt-free and will exit 2017 debt-free.
Nevertheless, SRX trades 4 times higher per flowing barrel, 2 times higher per boe of 2P reserves, 3 times higher per CF (13x CF versus 4x CF) and 4 times higher per Montney acre ($5,300 per Montney acre versus $1,100 per Montney acre). This tremendous valuation gap is insane. Read Value Digger's article below:
https://seekingalpha.com/article/4051519-chinook-energy-free-last-montney-growth-engine-begins-bargain-valuation
Please also note that CKE will definitely fund the expansion of its compressor from 25 to 50 mmcf/d to accomodate the increased volumes from the existing wells and host the new volumes from the 4 Montney wells that will be completed in Q2. There is no question about this expansion, the expansion has been announced twice in two separate press releases:
2017 Capital Budget
Chinook’s Board of Directors approved a $40 million capital program for 2017 focusing on the development of liquids-rich natural gas at Birley/Umbach, British Columbia. This capital budget will also fund the expansion of Chinook’s 25 mmcf/d compressor station at Birley/Umbach to 50 mmcf/d. Chinook’s pace of Montney development will continue to be prudently managed to demonstrate growth from its Montney assets while maintaining a strong balance sheet.
Outlook
On January 23, 2017, we announced a $40 million capital program for 2017 which included the expansion of our facility at Birley/Umbach to 50 mmcf/d and the drilling of six (4.5 net) wells which were anticipated to be 1,600 meters in length with frac spacing of 60 to 65 meters. We are optimizing our drilling and completion program which has been revised to now include the drilling of four (3.67 net) wells, two (2.0 net) of which will have lateral sections of 1,600 meters in length and two (1.67 net) will have 1,800 meter length laterals. All four wells will have tighter frac spacing of approximately 52 meters from the original 60 to 65 meters. The additional length of two of the wells is anticipated to add to the recoverability of hydrocarbons while increased frac density is anticipated to result in increased initial well rates.