RE:RE:RE:RE:RE:K vs N vs P - cut to the chaseThanks PabloLafortune, appreciate the analysis.
I think PIPE in 2019-2020 is a good analog, except KEL isn't drowning in debt. A measured approach to bringing on Oak wells to keep infrastructure there full while spinning the FCF flywheel at Wembley Montney and Charlie Lake will get them to a production plateau where maintenance drilling will yield significant FCF.
PIPE went from ~$2 to ~$4 quickly, I think only partly due to rising WTI and mostly due to reaching that FCF generation inflection. The financing under $1/share took off a ton of upside.
KEL, at $100 WTI is generating material FCF but is still building up towards that inflection point where they're only spending a portion of AFFO on DCET. Maybe that happens in 2024? Lots to prove out, but if wells perform to type this is a double from here when that happens. If it drops below $5 on a WTI washout I'll look to rebuy, otherwise will stick with KEL longer than I plan on sticking with PIPE.