5X CF at $60 dollar WTI ( CPG Stole Kaybob Duvernay )I heard about the metric from the Enerplus CEO on BNN, and he said that they were doing deals at 3X FF at 60 dollars in the spring and the assets have increased in value to 5X FF.
CPG Press Release
Press Release April 1,2021
Based on 30,000 boe/d of production, the purchase price reflects an attractive Acquisition metric equating to less than 3.0 times net operating income of approximately $330 million at US$50/bbl WTI, or approximately 2.3 times net operating income of approximately $400 million at current commodity prices of US$60/bbl WTI. These Assets are also expected to enhance Crescent Point's free cash flow generation as approximately $180 million of annual capital expenditures are required to sustain 30,000 boe/d of production. The Company will seek to further enhance returns through potential cost efficiencies.
Todays Evaluation
So if you evaluated the duvernay at 5X operating income at $60 dollar WTI, you would get 900 million/2.3 milion * 5 times = 1,956,000 million. = 2 billion dollar asset.
A 2 billion dollar is value is what should be assigned to shell kaybob durvernay sale in todays terms, just based on production, but there is another billion worth of land opportunity there. Not to mention this is not oil, it is condensate, about a 3-4 dollar premium per boe.
IMHO