RE:Do we cross $5 tomorrow? -Royalty sale without rush to very good prices.
-45% of production is light oil not heavy oil at discounted WCS (while many heavy oil producers have higher multiples than CJ).
-The percentage of medium oil is related with WCS price, but 50% of the production is hedged until June 30, 2018.This makes only about a 20% of production vulnerable to WCS price.
-This sale will reduce bank debt, the company will save $1.3 million from interests for 2018.
They produced 21,000 boe per day in January (two additional Dunvegan, Grande Prairie area, light oil wells brought on production in late February, NOT included).. They sell ONLY 40 boe per day. (50 boe per day of royalty interest production will be sold and approximately 10 boe per day of production will be acquired).
I understand that these so positive news were unexpected, most of us expect them in two weeks. Some caught out of the stock and will bash to have a chance to get in at a low price. Sorry guys, won't happen.