CKE's ADDITIONAL cash thanks to Station 2 above C$2.20/mcf CKE's total production in August was about 5,000 boepd, according to the latest press release.
So CKE's current production in Q4 2018 must be about 4,700 boepd due to natural declines.
Approximately 3,000 boepd are dry natural gas sold at Station 2 and another 1,000 boepd dry nat gas are sold through Alliance at Chicago citygates at premium prices. The rest is about 700 boepd that is liquids (Condensate, other NGLs, light crude oil).
Let's see now CKE's cash benefits from the recent rise in Station 2 price at C$2,50 per mcf.
CKE's assumptions have been based on C$1.44 per GJ or about C$1,50 per mcf, see guidance.
3,000 boepd are equal to 18,000 mcf/d, so:
18,000 mcf X extra C$1 per mcf X 90 days = C$1.6 million additional cash in Q4
18,000 mcf X extra C$0.70 per mcf X 90 days = C$1.13 million additional cash in Q4
According to the latest guidance, CKE says that its net debt will be just C$0.5 million by year end based on C$1.44 per GJ for Station 2.
But if Station 2 remains at or above C$2.20 per mcf for the entire Q4 (which is very likely), CKE will generate an additional C$1.13 million cash, so it will not only eliminate its net debt by year end thanks to this EXTRA C$0.70 per mcf but it will also make a cash cushion of about C$0.5 million.
Station 2 closed at C$2.45 per mcf yesterday......Do the math.