How to value Kelt - Sum of the parts.Lots of discussion on Kelt's upside, here are a few thoughts to ponder.
Kelt has a few operating areas Oak / Flatrock being the largest development area (i.e. Inga 2.0).
Wembley/Pipestone/Valhalla is reasonably mature, lots of non-operated Infra and very saleable.
Same for others, spirit river etc.
Kelt has roughly a $900M Market Cap, EV roughly the same (debt free).
Pipestone, who operates 'only' at Wembley/Pipestone has much less land, more production there and comparable infrastructure. Pipestone's EV is around $1.4BN, $200M debt, $1.2M Market Cap.
So at $5/share and current S/O, Kelt has a $900M EV. If Kelt continues to build out Oak/Flatrock (new plant) and more infra, more drilling.. they can build this up very easily to a $1BN Asset. So where does this leave the Pipestone asset? Saleable at $1BN given the land/production. So this roughly then puts Kelt's stock at around $12 / share, given the two 'main' parts.
Kelt's value is in their optionality and in contrast to Wilson's previous ventures, parting out Kelt would offer shareholders a lot of upside. I do see this as their plan. Leverage the CF at Wembley to build out Oak, and then sell off the parts, as they did at Inga. May be wrong, but shows the value of Kelt regardless, having choices is a good thing.
~TGC.