SPE has very high ARO which implies garbage wellsIt really surprises me why everybody blindly wanted a higher price but has not checked the key metrics of the deal per flowing barrel and per BOE of reserves, which were very fair.
Also nobody has commented on SPE's huge ARO versus its peers.
SPE had decommissioning obligations of $290 million, see it's latest report. This is huge and means that SPE has many garbage or low value wells. To realize this, compare SPE's ARO with Cardinal Energy's (CJ) ARO of just $130 million!
Alhough SPE and CJ have about the same annual production, SPE's ARO is more than double CJ's ARO!
This high ARO significantly reduces the remaining value from SPE's wells.