CEO is all In with his own money.....POU is one of the few Companies, where the CEO is all in.
How many Ceo's could add 135 million dollars of liquidity, and price the convertable debenture at the closing price, and avoid of lot of more expensive financing options. In fact he is so sure of his investment the companies debt is ranked subordinate to bank debt.
Crown Jewel
How much additional risk is JR taking in this financing, well he is drilling the crown jewel FIRST is he not?
Karr has many wells that produce over 2000 boe a day. The wells at Karr quite regularly produce about 2000 boe a day for the first 90 days. This is why the economics are soo superior.
Wells Licenses
Karr well licenses are appearing daily, and the question really is how many wells do they need to fill up the Karr plant? Well i don't think the answer is that simple because of heavy liquids loading, and liquids handling, and high pressure new wells, coupled with field compression tuning, NGL liquids, sour gas, water handling, condensate.
Plant Capacity
Karr now has 150 million cubic feet per day of total raw sour gas handling capacity, including 70 MMcf/d of sour raw gas processing, 30,000 Bbl/d of raw hydrocarbon liquids handling capacity, 2,200 Bbl/d of natural gas liquids recovery, and 28,000 Bbl/d of water handling capacity.
Karr has the capacity now all POU needs are the wells, so all that POU has to worry about the operational risk associated with drilling 20 wells? My guess is 20- 25 Karr wells in 2021.
Hedges Likely
I expect POU will hedge up a bit with all this capital spending.
How much will they add to the 2021 Capital Budget, my guess is this 150-200 million dollars, however their free cash flow my guess will be higher then 100 million, my guess is more like 150 million.
CEO Steps Up (Best CEO of 2021)
Name another company where the CEO stepped up like this to create 135 million in liquidity.
POU the best managed and best Oil investment in the entire Planet.
IMHO