Kelt needs all the Processing it can get its hands on Currently NYMEX Oil Futures are close to $80 in December 2024, so that is significantly higher than Kelts forecast of $75 WTI.
(Currently oil trading at $83.19 or about 113 dollars Canadian a boe.) Wembley/Pipestone has one of the largest Montney resource opportunities in existence, and Kelt is looking for ways to get more processing capacity.
The production from this area they are forecasting 57-62% liquids. However with the latest Charlie Lake well 78% NGL's and only a 10% watercut.
2/3 of the free liquids can be removed at the field batteries.
When Kelt get Wembley to 45,000 boe/day base on NVA evaluation, it will be the same produciton level of NVA Pipestone.
However it will have about 3.6 times the resource acreage, 50% more liquids per BOE, and Charlie Lake the icing on the cake.
The economics are significantly better at Wembley/Pipestone compared to NVA, and it is their Pipestone play that has driven all their growth and run up of their share price.
Page 31 of Presentation Clearly Wembley/Pipestone and their charlie lake plays are their best economics and netbacks. Their high deliverability natural gas play, is really not scaleable for the creation of a major play area, the land position is just to small. Likely only being used to secure some near term gas processing while wembley is built out. (IMHO)
Kelt is going to do everything possible to rampup Wembly/Pipestone quickly because of superior resource and economics.
Q4, 2024 will be a game changer for Kelt when 50 MMCF CVS Albright come on line. , and in Q3 we are finally going to see what they can produce from Wembley/Pipestone with only 59 MMcf of gas processing.
Kelt is way to cheap and NVA is a great company but Kelt should outperform them once the rampup of PIPESTONE is happeining, and production number begin to skyrocket.
MHP
IMHO