Pipestone EquationThe PipeStone equation is something like this, fill the plant as fast as you can because it is a Take or Pay situation, and the economics improve greatly the faster you can fill the plant.
This results in the cost of the Take or Pay contract being reduced by reducing the Pay portion, and it adds significant value to every BOE produced.
There is a convergance lately with more companies pursuing big expensive wells in the liquids rich montney/duvernay, POU small acquisition at Karr, CPG buying out Shell Duverny, WCP buying out XTO.
The numbers used to justify the purchase by WCP is 85 dollar WTI, those are pretty strong price assumptions. However WCP had some success recently in Karr before the acquition of XTO and i think it got them all excited.
Once NVA gets to its 90,000 boe target, it is off to the races.
According to Rafi from Canoe, these oil companies are going to become distributors of cash, and these are very high net back BOE at pipestone.
The big advantge of owning NVA stock is that the 30% growth profile for 2022 is not factored in and could be higher and likely another 20% in 2023.
IMHO