RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Encouraging WellIn keeping with a forest or woodlot analogy, good post btw, but isn't underspending in ARO similar to under replanting new tree's on a woodlot that has been harvested. Just hurts returns in the future.
YGR has been buying new land or woodlots. Bonterra has been just harvesting their existing woodlot.
The most critical press release for YGR coming up in my view is the next reserve report. I think that will do more then any CF or earnings number in Q4 results (i do expect excellent Q4 financially).
Proved reserves growth is going to be key number.
That will show if the lumber YGR brought to the mill is willows or nice red cedar.
I am hoping Ferrier area continues to have lots of red cedar in the woodlot.
SecondhandGnus wrote: Kavern and Rex, your interesting debate has got me thinking in terms of a forestry analogy, where woodlots are valued differently (assuming no development potential) depending on the value of the species and maturity thereof. Studwood/lumber is more valuable than pulpwood, which is worth more than firewood. High growth/value (think Montney) is worth more than lower growth (Deep Basin or untouched Cardium) vs lower flow areas with lots of existing vertical wells (older Cardium).
I'd put Yangarra in the 2nd category, while Bonterra is more in the 2nd/3rd hybrid. I own YGR since they are both priced the same, and while both can handle their debt, Bonterra's is a bit higher (and ARO is significantly so). YGR has more growth, but it has disappointed multiple times on production. BNE is on my radar because it's hated (almost a cigar-butt stock), has a corporate history of dividends (possible future re-rating when restored) and its P/CF is comically low. If YGR didn't exist I'd happily invest in it.
I think both are judged as high-risk companies, yet they are actually relatively low-risk due to their relative misprising--my guess is that YGR is a mid-2023 story, while BNE is more early 2024. Best wishes to you both, and special thanks to Kavern for your invaluable Cardium company analyses.