RE:Kelt Value - $8.70 to $9.70 Year End?I agree that speculating on asset value here is a good exercise but want to adjust some numbers:
2024 KEL exit run rate (assuming CSV Albright is at 100% by 12/31 and all necessary wells are tied-in) should be ~45K boe/d at 39% liquids (~26% oil) and should trend up during Q1/25 if NG prices improve and wells from the gassier acreage are operating. 2025 gets interesting:
At $3 AECO and $80, ~52,500 BOE/D (should be higher but I'm expecting delays / outages) and $25 netbacks (I'm using round numbers cause who the heck knows), KEL could see about $2.40/share (at 200M shares) of FFO, with significant growth. At a purchase price of 4x FFO minus some debt you get close to your numbers.
Of course, plenty of places for this to go wrong: plant outages, poor commodity prices and you get the $0.22/share FFO they posted in Q2. Could be a low point as volumes improve in Q3 and Q4, 4x $1 FFO annualized gives you a share price of $4. Average the two and you get close to where we are now.
Not owning any processing capacity increases operating costs, but the netback per BOE is helped significantly by the new oil focused production coming in flush for Q1/25.
KEL has a lot to prove on it's production capabilities to 3rd party infrastructure and the market for AECO needs to improve. As these things happen (ideally with some decent IP rates in Q4 and Q1) we should move further away from $4 and closer to $9.50, but sure it'll be a bumpy ride.