A way to go The latest Montney sales recorded in the BOE report offer an interesting way to judge just how undervalued CKE might be.
Using these sales as comparables, one gets a pretty wide range of indications as to where the CKE price per share at year end could and should be :
| Date | Company | Acreage | Liquid % | Price per acre | Price per BOE/D | CKE value per acre per share | CKE value per BOE/D per share |
| | | | | | | | |
| 2017-07-06 | Paramount (B) | 118,000 | 38% | 5,508 | 25,862 | 1.14 | 0.75 |
| 2017-05-30 | Paramount (S) | 47,360 | | 3,167 | 107,143 | 0.65 | 3.11 |
| 2017-05-23 | Crew (S) | 18,400 | | 2,663 | | 0.55 | |
| 2017-05-17 | Leucrotta (B) | 11,840 | | 3,041 | | 0.63 | |
| 2017-5-16 | Painted Pony (B) | 69,143 | 8% | 3,321 | 27,012 | 0.68 | 0.78 |
| 2017-05-01 | Triology (S) | 44,427 | 16% | 1,125 | 45,427 | 0.23 | 1.32 |
| 2017-04-11 | Pengrowth (S) | 23,424 | | 3,928 | | 0.81 | |
Looks to me that purely on break up value, CKE should be trading at about .75c to $1.00 per share.
But ……add to this:
It is a pure gas play not subject to the vagaries of OPEC
It is debt free
It is highly disciplined
It is well set up to export south to the USA where the potential growth lies
It should have $2 million cash in the bank year end
It owns a 55 4” pipeline with associated meter and storage facilities that runs through the heart of Montney.
Am I missing something?
Yes - a dividend.
Above based on:
End year production of 6,300 BOE/D project
Brierly / Umbach holding of 43,804 net acres
217 million CKE shares issued