RE:A couple of Kaverns points and views..and on Black Swan.... Kavern, thanks for posting. Very interesting.
kavern23 wrote: 1. Firstly, Cheadle12 must be called The Great Cheadle.
Now that that is settled onto to Black Swan.
2. Black Swan is a very unique situation and I don't think it can be used as a good comparision for alot of of companies.
Black Swan has had such incredible drilling success. They increased from 5000 BOE in 2014 to like 50,000 BOE they claim they are it. But it is kinda a fake "50K"...they have hooked on at least 20 wells recently....Black Swan is more like a 35K BOE company.
Lots of their wells start at 1200-1500 BOE and then after a well months stablize at 750 BOE.
So anyone trying to take say Black Swan sold for 20K a flowing barrel is acting silly.
Need to do some adjusts.
It is also why Black Swan likely wanted to do this type of merger....I mean they still get upside if TOU contuniues to go up.
But Black Swan owners had some future risk here as they really don't have that many wells contributring to make 50K. Even Black Swans older wells that are 3.5 years old...they are doing at least 500 BOE. It is sick how good the wells are. Abnormal sweet spot they are in.
If they could get a constant 3 dollars a MCF....some of those wells would have revenue of 22M after 3 years and still hammering along at 500 BOE a day.
Really economic for sure but they will decline out to 200 BOE at some point here
Such a win for TOU. And not just because its some of the best land and really economic.
TOU can control the pace of development in N BC better by owning more.
Until the LNG opens in 2025...risk that over drilling happens and the pipes all fill up.
The northern alberta Montny stuff has way more options then the BC stuff.
Tou can make sure Black Swan doesnt go to 100k BOE intil new pipe is open in 2025.
This is why i like the Albert Cardium right now...so much existing pipelines that less local risk of pipes filling up and lots of Cardium companies are too broke to over drill.
But the BC Monty companies all can increase production fast if they want too.
What makes Black Swan so special is their high producing condy wells also produces high ng mcf per day (8M plus). Normally sacrifice abit of NG chasing liquids.
At current commodity prices...price inflaction starting is going to become a problem...everything is economic for everybody.
Bigger TOU gets...the more they can control this from happening.
On the Alberta side/close to BC corder, I think Birchcliff has best land and positioning.
They are drilling monsters...and what is impressive is they are spaced quite close together.
Birchcliff should be able to sustain at 100K for many years .
By positioning I mean they have all the infasructure in place already to really grow.
I was going to buy shares in BIR before the analyst upgrade but I dont have the confidence in the management team. Its sad.
Like why the F*CK did they run a half cent divy through covid...seriously half a cent...
Others decisions I question that BIR has done.
Crew's best bet may to be hope that BIR decides it needs to get bigger or be swallowed.
Alot of advantages to being big.
I just don't see that many bidders being out there before 2025.
Canadian Natural Resources is probably saving every dollar of cashflow to eventually buy the chevron oilsands stake...that is going to still cost some B's.....
CNQ is one of Crew's most logical suitor.
I also was attracted to BIR over Crew in that I think BIR would have more bidding companies being interested.
Once ARX pays down some debt...BIR assets makes so much sense for ARX.
Depending on price...TOU,CNQ, and ARX alone likely would be interested in BIR.
But i don't like management team of BIR and this could be months and years away.
Decided to go different direction and I went Obsidian in Cardium.
I know..former Penwest and that would make a person want to puke but the ecomoics are too compelling for me too ignore. Isn't hedging issues at all, drilling fantastic economic wells (12k barrels in 30 days)...and they could cashflow 3 dollars and trade at 3.25.
Debt is the one ugly f*ckin thing here but I figure they can CF out of this issue. TIme will tell if I am right.
I hope Crew continues to do well for you guys. I will continue to be watching.