Stock undervalued - it is a $30 play. I own as many shares of pou as I do tet. I am very familiar with both tet and pou. On Friday, Pou sold off for a number of possible reasons. First, there was the perception that pou bailed out tet and perhaps overpaid due to the fact that the two companies have a large common shareholder. I had tet as a $10+ stock as soon as it deleveraged its' balance sheet and accelerated its drilling program. That has now been achieved with this merger.
The second possible reason for the sell off of pou on Friday was the possible cost of cleaning up the apache wells at the end of the deal. Assuming the cost is $200m in 10 years, pou effectively paid $15000 per barrel of production. Sooo cheap. Recall that vii paid $2.1b to pou for 40000+ barrels of production only a year ago. I like the metrics on the apache deal.
The third concern was that pou was no longer an oil and gas company with $10 cash and cash equivalents. This is a valid concern if you don't like the future prospects of oil and gas. Having said that, pou wasn't getting much credit for cash on hand. We are at or close to a bottom on oil prices. It was time to pick off assets at distressed prices. That was achieved by the Riddell family as it concerns the apache deal.
Here is my simple math to get to my share price estimate for pou. Tet should now be a $10 company or $1 b. Apache assets worth $2 b. Pou loses $10 of cash and cash equivalents per share but its' assets are still worth 1.5+b. Cumulatively, 4.5b divided by 120m shares post-tet conversion is $37.5 per share.
Reduce that number by $7.50 (or 20%) to discourage all the naysayers from piling on and you get to my $30. Go long. There is significant upside from here.