GREY:BNPUF - Post by User
Comment by
pablo87on Dec 05, 2019 10:37am
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Post# 30424770
RE:Who sold this asset for $6500 per flowing barrel!
RE:Who sold this asset for $6500 per flowing barrel!Comparative advantage or to each his own? By my napkin calculation, if BNP could do 8 like this, in 5-6 years they'd reduce their current debt by 1/2 at current commodity prices AND pay back the money borrowed to acquire the hypothetical 8 properties. So its definitely a good move for them.
We may never know what motivated the seller but if they had high netback properties like KEL or POU has for example, they could reinvest that money into drilling and generate at least 2X ROI. Plus they unload A&R. Would be a good move for them as well.
The question I have is, what are the big banks thinking? Because from Alberta/ATB, this is very good for the industry, need a lot more transactions like this. But the big banks may be thinking we just want to reduce our exposure and now we may have more loans outstanding to a weaker covenant. Of course if the seller was almost bankrupt, then they (the big banks) are also better off.
Reason I bring this up is the market reaction is muted. And the market in Canada at least is largely controlled by the big banks....
IMO. YMMV.