Talked with Sadig todayI have very much followed the Pipestone play of NVA and am very impressed with the speed and exploitation Nuvista has developed pipestone, Nuvista will fill their plant capacity by the year end.
Large production at Nuvista (Pipestone) has come on in a very rapid and short period of time.
Looking at the Map you can see the difference in approach that Kelt has taken regarding proving up the resource at Pipestone, Kelt feels that currently at Pipestone they have production behind pipe, and the field is not developed optimally for production because their objective is to prove up the play resource. The Kelt land has higher liquids resources then general production in the greater Pipestone play area.
PIPESTONE LAND VALUE.GT. 1 BILLION DOLLARS
Kelts feeling that the land alone at pipestone could be worth 1 billion dollars, they are the second largest landowner in the region. Kelt can not add significant production at Pipestone until year end when more processing capacity is available.
With the plant issues in Q2 and Q3, a station 2 short term gas price collapse, it looks like Kelt is going to complete the year strong. Likely 30,000 boe is going to be the 4th quarter production number.
It is hard to imagine that with a.GT. 30% increase in production year over year, and likely a 50% increase in reserves.
Kelts share price is only 10% higher than it was a year ago, and their reserves have significantly increased year over year. The current NAV of Kelt shares is $11.47 a share fully diluted. My guess that NAV will be around 15 dollars a share in February when they update the reserves.
The current price target of 6 analysts, have a price target of $8.56 but I think this is very conservative. 80% of Pipestone has been delineated and so then a monetization opportunity will be available soon, 3 well licenses were received at Oak, so they are drilling wells there.
They are also going to pursue their Charlie Lake opportunity, and it has more oil and will provide stable low risk cashflow, and the proving up of another resource opportunity.
I am all in again at Kelt, what I like it the debt free company with thousand of drilling locations, and with zero debt it really is you can think of Kelt shares as a commodity currency and protection from a currency collapse. That my conspiracy theory.
Good Luck to ALL