GREY:ZARFF - Post by User
Comment by
pablo87on Jul 26, 2018 6:30pm
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Post# 28374266
RE:RE:RE:North Dakota related
RE:RE:RE:North Dakota relatedIt is indeed a buyer's market, the multiple on field netback seems to be around 3x? Eagle bought an asset for $30M 3 years ago and sold it just recently for $13.8M!
@$65 WCS ($55 today?) and $82 LSB, 43 cents represents ~2.73x field cashflow. 3x field cashflow equates to 60 cents. 80 cents represents 3.32x cashflow, $1.20 represents 3.92x field cashflow.
Drilling down into each asset, I think North Dakota is worth more than 3x; Canadian conventional asset the problem is reclamation liabilities reflected by ZAR's low LMR; and Little Bow ASP needs a lower WCS differential which could happen but only 2+ years down the road?
IMO, a sale of Canadian conventional assets - in whole or in part - is probably a step in the right direction. Whereas North Dakota and Little Bow ASP have upside (albeit longer term for the latter) so selling now might be less than ideal.