US vs CDN Reserves valuations...And what it means for Kelt Wembley.
So first of all In the US they only use proved reserves, probable is not used (allowed).
Their way has a method to the madness in the sense that M&A transactions tend to track (anecdotal) the EV to the reserves between acquirer and acquirer.
So like I said before, the valuators in Canada use $4 gas which is not realistic. This makes gassy companies/plays worth much more reserves wise than they should.
Kelt as well. Pouce Coupe has similar 2P reserves valuation per boe as Wembley even though Wembley has 2-3x the oil%.
Now to US where markets are more efficient and more transparent IMO.
EQT biggest dry gas has 4B proved reserves, enterirse value of $24B implying reserves worth $6 per BOE of gas.
Diamond back (FANG) and Matador are 60% oil and EV per boe is more or less $20. Implies the oil is worth at least $30/boe of proved reserves (reserves Gassier than prodn ie oil worth even more).
If we test this against ARX but in C$, we get $6B or so value of NG and NGL and $8.7B oil and conde. close enough to ARX EV IMO.
Kelt Wembley proved is 146M, 47% *72% oil or 50M barrels or $1.5B. + $600M for NG. $2.1B. And they're not done proving this play out either - they have another zone to add and charlie Lake in the area too
I'm very negative bagholder I admit but I'm still holding. Because of Wembley (the rest is ok).