RE:Not a fan of the Ranger AcquisitionMyHoneyPot wrote: Canadians should be aware that producing 11 million boe of oil in the USA, the size of the convential oil and gas industry in the USA, is 10-15 times the size of the convential oil industry in Canada. (oilsands, thermal oil excluded)
The EaglesFord I am familar with the early movers in this play were Pioneer and I was part of the initial activity.
With oil business being that much larger in the states, do you really believe a Canadian company is going to buy Tier#1 acerage for Tier #2 pricing, and show Americans how it is done?
On market call i heard about Eric's expert resource going to Texas so he could provide Eric his accessment of the play, good luck! a Canadian with go down to Texas providing an opinion on a complex play 20 years in the making.
This is Tier#2 acerage otherwise it would not exist, the US enviroment is much more competative than Canada, and they have a much more agressive posture.
Now you have spread sheet jockies like Eric making assessment where he is going to tell the world that Baytex buying thes assets has turned it into a Tier1 play and the stock deserves a rerating, and they need to pay him 75% of the FCF so his expert trading team, (Which is the only thing he is good at) can trade out of the stock and leave shareholder holding the bag.
The only issue here is this, with the ranger acquisiton of approximately 3 billion, with more than a billion in senior notes to finance it, with 860 million shares outstanding, 2.8 billion in share holder liability, a 1.5% dividend, and share buyback in place, this is another TVE in my opinion.
The assets may be reasonable, but the balance sheet is a mess.
Good luck, with almost 900 million share how can they do anything that is meaninful for the shareholders, and with to much stock there will be to many sellers.
This looks like another Eric Nuttal Pump and Dump.
IMHO
Have you looked at any of the recent corp presentations? Have you seen the improvements in cumulative oil produced in the Eagle Ford? Did you see the 6B in cumulative fcf in 3.5 years at 90 dollar oil?
Yes, there's 2.6 B in debt. There's a debt target target of 1.5B with 50% of fcf returned to shareholders until it gets there. So, 2.2B in fcf later, the shareholder returns jump to 75%. So that's 75% of the remaining 3.8B which is 2.85B. Together that's over 4B in shareholder returns in 3.5 years. Maybe oil doesn't hit the 90. Maybe the returns are over 4.5 years. Or 5.
Regardless, what we've seen so far is a significant increase in well productivity on the Ranger lands.
And it's not a bunch pf Canadians going to Texas to show the Americans how it's done. It's a new, American CEO with significant experience in Texas and with the Ranger team.
Your comments on nuttall are laughable. He's an oil analyst. He's not going to Texas to show the Americans how it is done.