RE:Montney Wembley Capital efficiencyI always respect your analysis, and it is good to have different views regarding the same opportunity.
That single sentence resonated with me as well, but it was more from the perspective of the ability to recycle capital. I have seen many investment decisions in companies based on how quickly the capital deploy was returned, so that the capital could be recycled and redeployed it in another opportunity.
Wembley 103/14-14-73-8W6 (Montney D3)1,374 BOE/d (55% oil and NGLs);
Wembley 102/14-14-73-8W6 (Montney D4) 1,291 BOE/d (54% oil and NGLs);
Wembley 103/15-14-73-8W6 (Montney D3) 1,290 BOE/d (59% oil and NGLs);
Wembley 102/15-14-73-8W6 (Montney D4) 1,196 BOE/d (59% oil and NGLs)
So these D3 and D4 wells will pay out pretty quickly considering the IP30 numbers, so the ability to recycle capital and drill new wells will be fantastic. I have seen many other montney plays that do not get this kind of IP30 results, but some caution, the play is pretty large in size. How long does it take for the wells to pay out?
I also saw a few other thing in the Q3 report that were encouraging, hopefully i cheer you up a bit.
The production number were up a bit as a result of fixing some issues with the gas plant. Also an update on the pipeline to Pouce Coupe is nearing completion.
Business Front.
So Kelt you know is kind of structured the same way as POU is, and POU just sold off a business unit (67,500 boe/day). So you will see how capital is returned to shareholders in a tax efficient manner. The name plate metrics of the deal suggest 3.325 billion dollars, but the land swap facilitates the move a ton of ARO liability off POU's balance sheet while giving them some gas production and horn river assets they wanted. I value the deal likely north of 4 billion dollars.
IMHO
MHP