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Kelt Exploration Ltd T.KEL

Alternate Symbol(s):  KELTF

Kelt Exploration Ltd oil and gas company. The Company is focused on the exploration, development and production of crude oil and natural gas resources in northwestern Alberta and northeastern British Columbia. The Company's assets are comprised of three operating divisions: Wembley/Pipestone in Alberta; Pouce Coupe/Progress/Spirit River in Alberta, and Oak/Flatrock in British Columbia. The Company’s British Columbia assets are operated by Kelt Exploration (LNG) Ltd., a wholly owned subsidiary of the Company.


TSX:KEL - Post by User

Post by PabloLafortuneon Dec 29, 2023 1:43pm
216 Views
Post# 35804277

Relative advantage when Natgas is low?

Relative advantage when Natgas is low?So natural gas prices are very low so it's preferable to be more liquids rich overall and to drill more liquids rich targets. Kelt is not paying back debt, buying back shares or paying a dividend. All cashflow going to capex.  So if after drilling additional wells they have more gas supply than gas processing capacity, there are different methods to handle this. One of them when oil price is reasonable but gas prices low is to shut in Gassier wells and connect oilier wells. While That does seem somewhat inefficient, they're in a way storing the gas until prices are more reasonable (kind of like storing lawnmowers for example in the fall for next spring season). Plus when new 3rd party processing capacity comes on line, they have the supply to meet their take or pay.

This is an advantage Kelt has that others may not have because they don't have these extra wells or they have one or more of the aforementioned obligations (debt, buyback, dividend) - (these others are forced to clear out their remaining lawnmower inventory in the fall so to speak).

YMMV. I could be all wrong and often am.
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