Ovintiv wants Alberta Montney-Investment strategy turnaroundMap of Ovintiv - POU Transaction Clearly Ovintiv wants the economics associated with Karr+Wapiti, in the Prolific Alberta Montney. On MarketCall yesterday Eric Nuttall has said this has provided stimulus for improved evaluations for Montney Players.
Really 3.325 billion in cash plus a major land swap that provides both production, strategic land positions, and reduces ARO. This deal is likely value north of 4 billion dollars.
Kelt is a large montney land holder, and Wembley Pipestone is the most promising emerging Montney Oil rich play.
Kelt is really to cheap, and CVS Albright is not that far away as well as the gas plant repairs will improve production in Q4. Kelt is on a path of continued production.
The sale for POU was the disposition of their Grand Prarrie division that they have reporting separately. This will be a tax efficient distribution to Parmount share holders. The same way kelt will do when they monitize wembley/pipestone.
I would say Wembley pipestone, has cheaper well costs and higher liquids content than most montney plays, and has been deliniated in a careful and thoughtful manner. Plus the charlie lake adds better 1/2 cycle economic opportunity.
This asset is a crown jewel and Kelt will do very well with it.
IMHO
MHP