RE:RE:RE:RE:RE:RE:RE:RE:Can anyone answer why.... Given the new wells they're drilling, this lines up exactly with what I discussed here below as their strategy. I get the feeling that they've made an asset sale & have some extra cash that they've put into drilling for gas to capitalize on these excellent prices.
The Great Cheadle12 wrote: I'll preface the below with "with prejudice" as it's my interpretation of the conversation, but to the best of my knowledge these are the facts I took away:
- Pay down or off the RBL to $300M.
- No details on the 2021 Infrastructure option, to tell me would be insider information and clearly they wouldn't.
- Continue with off market, non-core asset sales, no details provided.
- Any and most proceeds would go towards production growth given strong commodity prices.
- Grow production to bring D/CF to around 1.5-2x. So this would mean approximately $125M-$150M per year.
I would suggest run your calcs on the cash flow of $125-$150M per year, then would determine the production required at various commodity price scenarios.
My ballpark is they plan to grow production to 30,000bpd and likely trim a bit more debt down if needed.
I see the company being sold in full by 2023/24, but not in the near term.
Again my interpretation. Caveat emptor.