Kelt Value - $8.70 to $9.70 Year End?Did a little number crunching this evening comparing Kelt to Crew. Tou paid approximately $43,333 per producing BOE for Crew. Based on Kel's forecasted year end production of 40 to 45,000 BOE, the value of Kel's shares would range between $8.70 and $9.80 per share assuming of course Kelt receives a similar offer per BOE.
The two companies both have very sought after land positions. Crew has 207,000 net acres in the Montney and Kelt has 340,000 net acres in the Montney. The bonus for Kelt is of course more acres in the Montney, and 88,000 acres in the oil laden Charlie Lake and another 163,000 net acres in other plays
Crew has 28% liquids and very little of it oil, whereas Kelt has 33% oil and NG liquids.
Of course Kel debt of $63 million is very attractive imo. Crews debt of $240 million was also attractive.
i think the sale price would be greater than $10, but no one knows for sure lol. As we get closer to Shell's LNG commissioning date in 2025 (starting To take NG this week I believe), there will be other takeovers imo. Also before year end Shell will finalize their decision ( with partners) on whether they will proceed with doubling the capacity . The TRP pipeline only needs compression added.
I had guessed that Crew would be taken over by CNQ, Tou, Shell or ARC. I think Tou has their prize now, so CNQ and Shell I see as being the most likely purchaser of Kel. I think Arx might be a little too small for this purchase. I forecasted Crew would receive $8 minimum. I was wrong as it is basically $7 although it still could be close to $8 by October 1 estimated closing . We need higher NG prices to make this happen. Each week storage is getting closer to last years inventory and closer to the 5 year average.
Obviously this is just an opinion, but it is fun to do a little speculation . I firmly believe Kelt is taken over in less than a year and likely sooner. It will be interesting to see the comments? I have started accumulating some Kelt. I am not a really large investor , but a big believer in our Canadian Oil and NG industry . I was fortunate to held some Crew. I am also a big believer in Tou, CNQ, Su and to a lesser degree WCP and CVE.