Final ValueA few months back one of the banks estimated the value of the deal at $18. This was before the run-up in O & G prices.
Using $6 and $40 Cdn. for O & G, I calculate a final value of $21+.
As follows;
- Trust fund will have a CF of $219M / year, less operating costs of $.78/mcf and royalties of $1.2/mcf leaves a net CF of $146.7M.
-Estimate distributions at 80% or $117.4M for 39.6M shares is $2.96/sh/year.
-At a yield of 20 % the trust units would trade at $14.80.
-The residual POU would have a CF of $3.50/sh which at 4 times CF equals $14.00/sh.
Therefore 600 current POU shares would have a value of;
-600 residual shares Times $14 = $8400
-100 trust units at $14.8 = $1480
-300 rights at $9.75 = $2925
-Final value = $12805 or $21/share.
This looks like a very good deal and I am holding a lot of these shares.