Chinook Energy Inc. Common CNKEF

RE:RE:RE:New comments from "Value Digger" (TOP-100 Financial Analyst)

[Bean_and_Dunn]

Obviously i am just dreaming.

The facts are that CKE did average 4,850 BOE/D from July 18-24th.
Their 4 new wells were substantially more successful than anticipatel and will add very significant production. They do also help delineate the play.

At first blush this production will be around 7,048 barrels per day of which a significant amount will be condensates which attract premium pricing. Even if CKE cuts back substantially and only produces at half the initial production say 3,500 BOE/d we could be looking at December prodution 8,300 BOE/d. Even allowing for production declines in CKE's other 7 wells of 1,000 BOE/d we are still looking at 7,300 BOE/d These numbers suggest that CKE has met all its projections and then some. At the same time it has reduced costs. Payback is shortened, and because they are concentrating their energies in a one setting operating costs are and will drop significantly.

Soon would be investors will quit "looking in the rear view mirror" and will begin looking more and more towards the future. Chinook's past earnings history would scare any novice off. I totally agree. Most automatic generated program buy sell recommnedations would quickly rule CKE out as an investment.

This is a turn around story if I have ever seen one. It is not the same company it was 1 year ago. It no longer has high operating expense wells to balance against new wells. Year end production last year 1,643 BOE/d is tiny compared to present and expected year end prodution. First half production averaged a constrained 3,576. Okay that is more than a double. Even if CKE only adds half of what the latest 4 wells have come in at production will quadruple from year end. At present there is not any debt, production costs are dropping. This is the 4th quarter of positive cash flow. Sorry for getting so enthusiastic.

"Chinook owns 70 (59 net) DSU’s of Montney rights at Birley, along the shallow edge (<1,400m depth) of the prolific Montney fairway."

In my post I quoted from page 12 of their recent presentation. 

"Netback recently increased by $2.70/boe as a result of CKE’s new gas handling agreement in NEBC (covers 20 mmcf/d of firm service until May 2019, with interruptible service for volumes exceeding 20 mmcf/d)."

The quote above comes from the company statement on page 12 of their September presentation and should help to dispell the worry some posters have tried to engender in regard to falling prices in the gas area at least for 20 mmcf/d for the next 1 1/2 years.

I hope this helps clear up matters.

B&D