RE:Presentation"It would of been nice if they said that. Instead their appendix shows Central Pembina production dipping in Sept 2021 - not sure what to make of that. " John, This is from my model:
| July | Aug | Sept | October |
| 24859.6 | 24217.3 | 23611.6 | 25485.6 |
Actuals were 24164 for Q3 and my model has 24229 BOE...i am prob off the "days of the month weighting". But less then 100 BOE off. Getting better.
So I could see something off in Sept John...but we are back to normal in OCT...like 1600 BOE higher. Could be wells offline in Pembina to frac and tie in those new Pembine wells...host of things in Sept that could have made lower production.
But it is not a long term concern at the moment.
JohnJBond wrote: There are some things in the new presentation that make no sense to me.
1. They provide a 2021 estimate based on an oil price range of 75-80 WTI. The Funds Flow from operations is estimated at 223 - 228 million. That seems highly misleding to me. A $5 change in oil price should produce much more than $5 million more in funds flow over the year.
I'm assuming they must are using $75-80 for the last month and a bit of 2021, and thinking that a $5 price difference in the price of WTI over that period, will impact FFO by $5 million.
On the next page down, they state the actual FFO for each of Q1 - Q3. This is $137.9 million.
That means they are estimating Q4 at 85.1 - 90.1 million FFO based on WTI of $75 - $80.
Their prior estimate (if I remember correctly) was $88 million at the mid point of WTI $77.5. This is the same - meaning they apparently havn't included the PROP pruchase into thier 2021 estimate.
2. In their Appendix, they give a new forecast that includes the PROP pruchase.
This time they state the 223-228 2021E FFO is inclusive of PROP, which is the same as above. This is odd, because it implies 2021 FFO after PROP as being the same as forecast before the PROP acquisition!
Also, compare the pre PROP prodution guidance with the post PROP guidance.
Those numbers are 24,300 - 24,500 and 24,600 - 24,800
These are the estimated average BOE/day for all of 2021. Before Prop aquisition and after.
ie, adding PROP increased the average BOE in 2021 by 300!
How does that work? You buy 2400 BOE/day on July 1, but it only adds 300 BOE/day if you spread it over 12 months!
If you buy 2400 BOE/day on July 1 (and it stays steady all year), it should increase your average annual BOE by 1200/day.
Why does the presentation indicate only 1/4 of that?
My first impression is that they have only added PROP from Mid Nov until end of Dec to their 2021E. That would be 1/4 th of 6 months - ie 1 1/2 months. It would also be roughly consistent with a mid Nov close, which is what they initially suggested.
If that is the explaination, then why was the PROP acquistion stated to be effective July 1, if the 2021E post PROP production includes PROP acquired production only after Nov 15?
Is there another explaination?
Now for the positives.
From above they are estimating Q4 at 85.1 - 90.1 million FFO based on WTI of $75 - $80
Personally I'm going with $80 for WTI average for Q4 (Oct's average was $81.48 and Nov is just over $80 so far - with a few days to go).
There are now 80.7 million shares (post PROP). ie about $1.11-$1.12 in FFO/share in Q4
IF prices stay at $80 over 2021, then FFO increases from here as production increases from whatever it is now (looks like they exited Q3 at somewhere between 23,500 - 23,900), to something closer to 30,000 in early 2022 as has been suggested elsewhere.
Its worth noting we can infer an average Q4 BOE level.
The presentation gives an annual estimate of 24,600 - 24,800.
It also gives the average production from Q1 - Q3 (23,225, 24,651, 24,164).
This means they need to average 26,360 - 27,160 BOE/day in Q4 to get the 2021 average of 24,600 - 24,800BOE.
It would of been nice if they said that. Instead their appendix shows Central Pembina production dipping in Sept 2021 - not sure what to make of that.
We can also infer the Q4 BOE range if they had not acquired PROP (25,160 - 25,960 BOE/day)
With or without the PROP acquisition they estimate increased production in Q4. That message was not explicity stated in the presentation. The opposite was implied by the graph showing central pembina's production decline in Sept 2021.
All said, there is a bit more data to go with. But some of it is not as clear as I hoped it would be.