RE:Now we know why, the acquisition of VenturionLooks to be a really fantastic deal for Cardinal.
They basically bought a Hemisphere Energy for under 50 million and look at Hemisphere market cap and enterprise value.
The cash component likely allowed CJ to get this so cheap. Under 70M is a steal.
It goes to show how little buyers exist even for good small fields. The Killam field Venturion has is only a township away from CJ land and it is better then CJ's stuff as venturion killam field is all horizontal wells drilled.
The beautiful thing about the asset CJ bought is the majority of those wells were drilled in 2016 and 2017. So not too old that wells are really depleted but old enough all the flush production has passed.
Field should have low decline rates now.
I also see water injections...should be stable free cash flow generating property and looks fully developed.
CJ also get a MICA property in BC.
No point in drilling if CJ can buy this cheap.
But f*ck i have clue even on a prediction to how the market will react.
My gut is leaning towards this news could be somewhat priced in already.
Venturion took half in cash and half in shares after debt repayment so they shouldnt be selling in near term.
I mean CJ Q1 was only so-so. Based on Q1 CJ look quite fully valued and stuck in the 2.80-3.30 range.
Deals like this definitely help CJ's bottom part of it's trading range get higher. I think as long as oil is somehwat decent price...CJ will stay above 3.05 ish. I don't we go lower then 3 bucks now even if we have some bear days coming.
Definitely good news for long term holders.
Canadaforoil wrote: Not sure how this will play out but a mix of shares and cash with issuance of new debt at 10%, which is also convertible. I am guessing somebody didn't like this deal and bailed out of their 2M shares. Any thoughts on good or bad deal?