RE:RE:RE:RE:RE:Rally ? What Rally ?
Doc. Watched the SG video and have a few takeaways.
The interviewer asked him if they missed the run-up in gas prices (SG said it has been a 10 fold increase) and SG basically said they "saw it coming" and reserved a royalty possibly worth US$2.5MM, which is helpful. I see that their last reserve report on the shallow gas they sold was based on a price deck of about US $5.40 mcf, so 10X would have had a material value impact. That said, to maintain the Proven reserves in the reserve report, there was about US$21MM of future development capital required to maintain those proven reserves. No point looking back in the mirror but they probably made the right deal to sell that asset. The mistake they have since made is they didn't execute in 2021 and they now say they are chasing deal packages - never enjoyable unless you have a premium currency (eg. your shares trading at a premium to NAV). When VLE is trading at a 30-40% discount to NAV the only currency they have is cash and USD$40MM doesnt go too far in this market, except to cover the G&A for a few years.
Not sure I see a drop dead date in this interview - other than SG said it "should be an interesting 3-6 months for shareholders", whatever that means.
If they haven't done a deal by the next AGM (assume May 2022) shareholders should speak w.ith their vote on the entire slate. Fresh small international players like Tenaz (recap of ATU) could probably do an accretive deal with VLE any day of the week just for their cash - if they didn't liked the deep play. I own this stock because I view CDN$0.60 share as a floor but this team has busted it through the floorboards. If they cant get a farmin partner by the end of Q1 2022, that tells me something about the play.