Deep Basin Production - effectively 250,000 boe/d 25% LiquidI asked stockhouse to remove my last post. I am going to repost in a more meaningful way.
Slide 20 from Corporate Presentation Link 65% of VET Production, (Deep Basin), produced 35 percent of the Companies projected FFO.
So 135,000 boe/day corporate means the deep basis in producing 87,750 boe/day, and that is generating 35% of their FFO
The amount of
deep basin production VET would need, which is approximately 25% liquids to meet the FFO projection for 2025 is 250,000 boe/day
So effectively when compared to a deep basin producers that produces
250,000 boe/day Vet would have equivalent FFO.
So lets look at a deep basin producer PEY, who produces 120,000 boe a day, and third quarter issued a dividend that was not fully funded. They paid out 125% of FCF
PEY currently has a 3.4 billion dollar market cap, produced in Q3, 2024 120,000 boe/day 12% liquids. 1.36 billion currnt debt Q3 FFO 154 million. 125% payout ratio
So PEY in Q3 had no free cash flow (125% payout ratio), only 12 percent liquids, and only produces 120,000 boe/day in Q3. With a Market cap of 3.4 billion dollars today.
VET effectively has 250,000 boe/day of 25% liquids deep basin production (Proforma), in Q3 before the merger they had 275 million in FFO and FCF of 154 million.
VET currently has 2 billion in debt but effectively is twice the company on paper as Petyo, so their debt to trailing FFO is significantly less than Peyto.
If VET had a market cap of 6.8 billion in line with PEY evaluation it would be trading for about $44 dollars. IMHO
MHP