RE:RE:RE:Treasure Chest of Goodiesi am aware of the pou asset base. i described it as a mix of good assets and poor assets. I describe a poor asset as uneconomic at current energy prices and higher. they have a number of uneconomic assets that they spent real shareholder capital on. they are PERMA bulls on fossil fuels. having said that if for some strange reason we get a return to VERY HIGH energy prices, POU will be a great place to be.
here is the takeaway. many of their non core assets are worth zilch today. they don't care about OPERATING their assets. they care about Monetizing them. DEBT is their freind. Complexity is their freind. They don't care much about their partners. they care about the "family".they will do what is best for the "family".
this stock is undervalued as it ORDINARILY is because of all the factors above. the play here is that the family will monetize some assets and close the valuation gap to make it less undervalued.
these are truisims. It's a complicated MESS.
the family will take on lots of debt at times.
the famility does not care much about the stock price in the short term.
they care little about operations and lowering costs.
beware of being a MINORITY shareholder in one of their entiites. the trilogy and
perpetual shareholders have taken a BIG OLE BATH.
best of luck. in canada I have invested in a proven value creator who runs efficient, and TRANSPARENT operations.
pablo87 wrote: Its very messy for sure - they have a lot of assets and minimal disclosure - not the best formula for mom and pop investors. My understanding of POU's assets is as follows: (Its not that complicated if you follow the map on page 3). There are 3 main assets:
#1 asset is Karr/Wapiti (they gave a glimpse of the ROI in Q1 report) aka Grande Prairie region (it also includes Resthaven/Jayar). The potential aka nameplate is outlined on page 7. Very high netback. Problem is infrastructure - their own at Karr and on standby for Keyera at Wapiti.
#2 asset is Kaybob - not quite as good as Karr/Wapiti it seems (no results breakdown provided to my knowledge).
#3 asset is Central alberta - no breakdown so doesn't seem that good except for Willesden green which they seem to have high hopes for. Almost no capex being spent. Its also where the free title land and the other lands are located.
Page 7 outlines the potential of each of the above but doesn't clarify what belongs to which region.
After that, you have:
#4 Liard Basin (page 23) - very large gas reserves up north. Not producing afaik.
#5 Cavalier Energy (page 23) - the oil sands play. Non producing.
#6 MGM Energy (page 23) - Horn River? Not producing afaik.
#7 Fox Drilling (page 23) - this is just their 100% owned drilling sub, is $150M the book value?
#8 Shares of others (Page 23)
The 2 producing assets that are not mentioned anywhere are:
#9 Birch Montney Joint venture - not sure what the results are here, what the deal is, what its worth, etc... It would be good to have a page in the presentation on it but they don't.
#10 Zama - not sure what the story is here but its an asset with some sort of abandonment issue.
I imagine they will unload 8,9,10 in due course. 4-6 as well if the price is right thought those are diversification plays (eg if gas hits $10/mcf then Liard becomes economic) and are the kind of stuff that keeps them around for so long. And of course sell some of the lands in asset #3. And Fox Drilling. We have no idea what any of these assets from 4 to 10 are worth (whatever the market will bear I suppose). Only # I've read is $150MM for the fee simple land in asset #3.
Hope this helps.