hold 3 years for 400% gain?seems like a smart investment to me... we buy today hold thru 2021 and look at what they will have.... gas production will be flat to up a bit... they will spend on liquids growth... liquid production will soar from about 2000 to 10000 bopd... and that is while under spending cash flow and reducing debt to about a .6 debt to cash flow a year. if we use a 5 times adj cash flow.... aav comes up with a share price of $8-$9 a share... so buy at $2 or so... hold thru 2021 for $8 a share and that with a very low debt to cash flow. A lot can happen in those years but these numbers are very reasonable. No doubt they will not allow the debt to go so low... as that would be very under levered... they will buy some assets from a weaker player... like maybe buy PIPE?or move into a new area completely...
no matter though, this is a solid company.... as is nva and kel and bir.... each has some strengths and some might offer better metrics... like nva is cheapest from an asset to market value.... kel has growth and marlet recognition leading to stronger short term moves... aav has low costs and potential from growing from near zero liquids, so starting from a lower base.... bir has maybe the best asset with the Gordondale oil pool but that is still an unknown as too extent of it.... all great plays... just got to weigh the strengths and weakeness and do the dd you need and place your money on the one you like... or better yet.. buy a few to add a bit of growth and value etc by the basket ownership approach. Also note by 2021 we should be clear on the LPNG potential from the BC coast! That liquid gas export will certainly move my price projections up.
hell own AAV for low cost, BIR for Gordondale bonanza, NVA cause it is cheaoest and KEL because it is great and the market and the funds just loves them. or do like I do... buy them as they move... when kel turns up... maybe look to buy the lagard... or when kel tops and drops faster than the others, you got notice the others will follow, just maybe slower... so you have a trading secret there for you to think about!
We actually are lucky to have so many good intermediate companies... I have not even mention TORC and TVE that are oily players.... I remember years long ago where the intermediate players were hollowed out... we had Geneis and Berkely and Cdn Hunter... they were all taken out over time.... now we got all those mentioned and peyto as well... and several others... this is a prime time to own an intermediate producer... they are cheap, they have got good assets in the Monteney or Viking oil... it is very good time.