Strathcona Resources Ltd BKBEF

Primary Symbol: T.SCR Alternate Symbol(s): STHRF

Energy Oil & Gas E&P

Strathcona Resources Ltd. is a Canada-based oil and gas producers with operations focused on thermal oil, enhanced oil recovery and liquids-rich natural gas. The Company has three operations, including Lloydminster Heavy Oil, Cold Lake Thermal Oil and Montney. The Lloydminster Heavy Oil segment has multiple large oil-in-place reservoirs with existing and expanding enhanced oil recovery (EOR) opportunities primarily located in southwest Saskatchewan. Its Saskatchewan thermal properties rely on the same steam-assisted gravity drainage (SAGD) processes as its Cold Lake Thermal properties. It is a producer in the Cold Lake region of Alberta. Its operations include thermal oil producing assets at Lindbergh, Orion and Tucker, with production from SAGD oil assets. Its Montney development is positioned in some of the active regions in the Montney basin, the condensate-rich Kakwa, Grande Prairie, and Groundbirch regions, and produces liquids-rich gas.

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Strathcona Resources Ltd > What is PIPE worth in mid 2022, just over a year from now

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Comment by skiptoggleon Jan 14, 2021 11:57am

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Post# 32295026

RE:What is PIPE worth in mid 2022, just over a year from now

Using your method we should be seeing a share price of ~2 a share right now.
Assuming the price per boed is still $50,000/boed today and not an expected future price in mid 2022. If there is a more current price to use here let us know.

16000 boed x $50,000/boed = 800,000,000
lop off 200,000,000 of debt leaves 600,000,000
divide by 280,000,000
gives us a price of $2.14. (this is close to the price before the BBI was taken over)

If we see $2.14 by end of 2021 that would be an amazing bounce back and hopefully a sign of things to come. Lot of external factors will continue to push back on that target such as 3rd party shutdowns on pipelines, condensate and gas prices ongoing global recession. Doubling production to 32000 in 2022 and beyond would put share price in the 4.28 range. Which anyone currently investing in PIPE would be extremely happy to see.

Given the current managements penchant for underpromising and over delivering I am looking forward to seeing how this turns out.

BTW if you take current sp and work backwards through this method you get a value of $27,275/boed

JohnFriesen wrote: Using $43US WTI and $2.50 AECO for the next 18 months, which both look fairly conservative now, PIPE says they will grow to 34,000 boed without needing any more share issues.

Past 2022, PIPE can grow production and pay down debt at the same time.

Anyway, at 34,000 boed, what is PIPE worth? Companies with a high condensate mix used to trade at over $100,000/boed, but those days may be gone forever. So, just to be crazy conservative, lets use $50,000/boed, which gives us an EV of $1.7 billion.

Ok, $1.7 billion minus their projected debt of $165 million.......lets round it up to $200 million.
So we are left with $1.5 billion of equity.

If the recent issue of preferred shares is eventually converted into common shares, and add in the outstanding options and RSUs, we will have about 280 million shares.

So, $1.5 billion of equity divided by 280 million shares gives us........$5.35/share.

I don't think I need to say anything more.