RE:RE:RE:US shale growth is keyAgree Cardboard. Echos many of the comments made by posters here over the last several months.
For now, oil looks to be range bound between 50-65, and will likely continue that way barring a very fast collapse in demand. More to those comments in Joseph's post earlier, but the key here is that BNE is a realtively low cost producer, and can still deliver returns down to about $42-43 before all FFO goes to capex.
Thus, considering a healing of the egress discount over the ensuing qtrs as you state, we should see a return to the former levels (15-25), back to being connected to oil price levels again.
Currently, there is no connection, and BNE might as well be selling hot dogs and popcorn for all that oil price is concerned.
I wish I had more capital, these are truly remarkable levels. BNE still delivering over $28mm in free cash flow at today's $52 oil and EDM/AECO. Thus, we are only $12mm away from the former dividend of $1.20/ year.
That's a 24% Yield payable only $3 up on current WTI. Like what a complete joke this valuation is. Also bear in mind that's with a terrible AECO of 1.60 (annual), and histroically wide spreads of $6 EDM. The only thing really in favor is the USD conversion.
See for yourselves below.
Whenever these guys get done with debt reduction, maybe a year, 2, you are getting a 24% yield today, with $50 oil and normalized egress/AECO. Only wish i had more money to buy.
| WTI Price | 52 | | | |
| diff | -6 | | | |
| exchange | 1.33 | | | |
| | 61.18 | | | |
| Quality dis. | -3.25 | | volume | $$/ Day |
| Realized | $57.93 | | 7900 | $457,647.00 |
| | | | | |
| AECO | $1.76 | heat adj. | 23850 | $41,976.00 |
| NGL’s | $30.59 | | 890 | $27,225.10 |
| | | | 12765 | $526,848.10 |
| | | /boe | | |
| Revenue | $192,299,556.50 | $41.27 | 68.86% | Total Liquids |
| COP: | | | | |
| Gorr @ 4.1% | $7,884,281.82 | $1.69 | | |
| Crown @ slide | $12,884,070.29 | $2.77 | | |
| OPEX | $66,626,917.50 | $14.30 | | |
| SG&A | $5,824,031.25 | $1.25 | | |
| decomm | $1,346,000.00 | $0.29 | | |
| SBC | $2,236,000.00 | $0.48 | | |
| Finance | $15,400,000.00 | $3.31 | | |
| COP | $112,201,300.85 | $24.08 | /qtr | |
| Cash Op netback | $83,680,255.65 | $17.96 | $20,920,063.91 | |
| Netback | $80,098,255.65 | $17.19 | | |
| | | | | |
| Add: Interest | $15,400,000.00 | $3.31 | | |
| EBITDA | $99,080,255.65 | | | |
| | | | | |
| Less: Sus. Capex | $55,500,000.00 | $11.91 | | |
| Free Flow – assets | $43,580,255.65 | | | |
| | | /share | | |
| BNE FCF | $28,180,256 | $0.85 | $7,045,063.91 | $6.05 |