RE:Headwater...I strongly suspect OBE's board of directors have had alot of meetings this fall.
And even manangement must be so focused on so much corporate development work.
It probably explains abit why our presentation looks kinda f*ckin bland....would be alot of potential scenarios for management to crunch through.
Be alot of things to gauge on exploring selling PROP or keeping it and developing it.
Until we can test our Clearwater land I dont think we sell it cheap as this is type of potential it has and a bid would likely need to be higher then what we can make internally keeping it and getting the FCF.
If our clear water rights are medium range per well...nothing as stellar as Baytex....
If we can sustain 7000 BOE on new clearwater production we should FCF 80-100 per year by year 3 of development.
3500 then 40-50 FCF at year three.
I fairly conservative in my numbers, chance to easily beat it. Not using crazy high wells. Just need medium steady.
By year two of development FCF will be quite good if Clearwater works. Not like a Duvernay.
I suspect with FCF estimates like that if things work...OBE would hang up the phone and not even listen unless a bid came with a 2XX M...have to be a 2 first I think to pick up the phone...
kavern23 wrote: Man I don't get why Headwater isn't giving us respect in including us as owning clearwater rights in their slide 11 of their investor presentation.
They show exactly our land but only show Baytex and Woodcote ownership.
We are not in the land legend yet they show Walrus, Nampa and Peavine. Exactly where we own.
Come on Headwater...Baytex and our land could turn out better the Nipisi and Marten Hills.
Don't have our land as white squares on ownership.
We own 100% now.
Headwater's current sustainable production rate in future is hoped to be 14000 BOE...and it flatlines at that.
Presentation says this is on current identified prospects.
If retail investors keep pumping up Headwaters stock price they might be tempted to get more land to grow to the 20,000 BOE size.
Land package size is very key in Clearwater....need more land to increase max prod capacity.
I think Obsidian is in a very attractive spot for a couple of key reasons in the Clearwater:
1. Clearwater is so shallow...rigs are so easy to find for it...it will be drilled up very quickly. Companies are going to have to search for new land. Deep Montney wells or Duvernay wells are different, new land is not needed at same pace.
These f*ckin companies are going to rip through land fast. Look at the land maps already of Headwater's core...lots of lines lol...of new wells.
2. Obsidian is positioned attractively with our land as we have another core area. If Headwater tries for Spur or Deltastorm....they are private and they are going to be expensive as they are already producing already.
Spur or a Deltastorm dont have a Cardium to go too. Headwater would have to pay a premium for either of those companies until they both have reached their match production. Spur and Delta will sell out at their peak.
A person should short headwater if they buy either spur or delta as those mergers usually fail to create value.
Headwater cant really buy Tamarack Valley as headwater is only going to be interested in remaining a pure play clearwater...and TVE is so much larger. Headwater has billion market cap so TVE couldn't justify the valuation.
Really when the time comes to get more land, Headwaters best options are OBE's land, CNQ, Husky or Rubelite.
I would bet my left nut Headwater is well aware of OBE's clearwater right's land and is watching the neighbour drilling results by Woodcote and Baytex very closely.
Wouldnt it be f*cking wonderful if TVE and Headwater got into a bidding war for our PROP?
Headwater has a 5.31 share price...they can issue shares in a financing...be demand for private placement if Headwater wanted too.
This is why I say things are improving each month at OBE.
Clearwater is another wildcard and things are getting more realistic there.