Chinook Energy Inc. Common CNKEF

RE:Chin up

[kisstopherp]

PeterM1 wrote:

Some interesting extrapolations can be made from the recent Cardinal purchase of Apache operations in Canada.

 

Cardinal purchase price was about 80% of the NPV (2P-10%) of the assets bought.

 

On this basis one could value Chinook at about .71 cents a share.

 

Another metric one could use is the Cardinal paid $64,000 a flowing boe.

 

Chinook’s average for this year is expected to be 4,200 boe.  Using the this number, CKE shares are worth $1.24 each. 

 

However end 2017 production is planned to be 6,300 boe. Apply this number and CKE should be worth about $1.86 a share.

 

But this is not the end of the story. Chinook has only 'booked' 15% of its rights in the Montney area.  There is a lot of extra hidden value that does not factor into these numbers.

 

For those who still care, I understand that the Cardinal et al shares will be delivered next week to entitled shareholders.

Unfortunately I don't believe this to be a true apples to apples comparison for many reasons one of which is noted in the previous post.

Chinook is natural gas weighted and Apache's assets are low decline oil weighted.

The the $300+ Million includes royaltes that Cardinal are going to try and sell for $130Million making the deal for the 5000 boepd approx worth $170 million.

The best comparison for Chinook are transactions that have alrady taken place in the N/E part of Britsh Columbia and they do show that Chinook is undervalued.

I maintain that Chinook like many if not all O&G Companies in Canada to achieve full value will have be bought out, they will not trade anything close to fair value in the short/mid term.

Your only worth what someone will pay for you - hopefully there is enough interest in offset companies around CKE that they decide to take a run at CKE to further consolidate the area.