Valuable Assets & Almost 4 Billion dollars cash -What to do?Well no one can argue about the timing of this deal, with gas at recent lows and oil trying to find a price range, do you think JR feels good sitting in that chair propped up by that 4 billion dollar bag full of cash and securities.
Now JR has some time to reflect on the Christmas Present he will sending to each shareholder a little into the New Year after the deal closes.
Really he has a lot of things to think about, and i am sure that the turnstyle at his office is lined up with staff and other companies that are looking for someone loaded with cash to invest in their latest proect or idea.
The one thing for sure is that POU alway has a pipeline of projects, and really doing a health check on the industry, gas very low in price and oil struggling, do you think all the companies are rolling in dough?
Many organic opportunities, like Clearwater, Cold Flow heavvy oil, Liard/Horn river the elephant in the room, not to mention other proects currently on the drawing board not for public disclosure.
Just for fun, would it not be interesting to drill the biggest ever gas well with current technology in the Liard basin, and create a new economic model of dry gas deliverability for future LNG projects.
Fox Drilling
Does anyone really think that FOX Drilling, Paramounts own private drilling company, of super hi-tech rigs is worried that they will not be busy after this deal?
Wilesden Green
Does anyone think that Wilesden Green with 249,000 acres could not use a little more capital and be accelerated, so that we could sell it as well? 50,000 boe day for 20 years. A bit more work and they sell it, in this case POU owns all the infastructure.
Norht Duvernay
Ramping up to 16,000 boe/day, CGR 532, and by the way it will soon be for sale, Pou owns all the infastructure.
Sinclair
Two wells drilling as we speak with a very, • Downstream transportation capacity has been secured that would enable the first phase of Sinclair production to commence as early as the fourth quarter of 2027.
So essentially POU sold off 70 percent of their production, however with 30 thousand boe still producing those drilling rigs will now be spending the maority of their time bringing on new production not maintaining existing production declines, maybe that was the plan all along.(Forsure). So it will not take long to rampup new production, facilities may still take a little longer.
POU has decided to invest in Wilesden Green Facilities to date, maybe the Keyera Wapitia plant just caused them a little to much grief. It also cost them a lot of time.
My napkin guess is that maybe Karr/Wapiti represent 50% of their value, the other assets may be of the same value but just need a little more investment. The (Karr/Wapiti) sale was effectively 22 dollars a share by itself, my guess there equal value left in the assets of the company or more, and the best asset of all is JR himself making POU worth somewhere in the 45 dollar range is my guess. Remember POU is debt free pretty well.
The most successful faimly in Canadians Oil & Gas lands on a 4 billion dollar cash deal, do you think they will not make good use of the proceeds in an way that is good for investors?
I am filling up my TFSA with this, as i expect major dividends, share appreciation, and i would not be surprized to see some asset sales like maybe the North Duvernay.
MHP
IMHO