Equal Energy Ltd EQU

What's Next?

[scissors14]

...we turn our focus to Equal's Canadian strategy and potential transactions that we believe will further benefit our shareholders.

[dbeaude]

I am sure glad they threw in that last comment regarding the Canadian assets (translated....they will be sold). The market makers better read in to their decision making because if they do not, the market may perceive this sale as some window dressing, market apeasement and remaining in status quo mode. The trust model seems to be coming together where the debt of only $110 million now verses $180

[Nawaralsaadi]

Hi db, I am here (sorry I usually post on the yahoo private board). I believe this is a good transaction; this is how much we got for the sold hunton assets: The sold assets had 2.24m barrels gross (1.8m net) in 2P reserves (73% NG), this means Atlas paid $8.3 per 2P gross barrel and $10.3 per 2P net barrel. This is a good price for 76% NG reserves, applying this same multiple to the core Hunton

[dbeaude]

Thanks for your valuable insight Nawar. They ought to end up taking 30% of their remaining cash flow and pay out $12 million for a dividend of ~5.7% (at a $6 share price and 4.3% at $8) which to your point will leave them $28 million to sustain/grow production and pay a very handsome dividend which would be the kicker up to the high end of the share price range . Trust the speculative

[Nawaralsaadi]

You welcome db. It is worth noting that our debt to cash flow ratio will dip to under 0.5 from 2.7 after the Canadian assets are divested, this by itself will lead to a major re-rating for the remaining entity. Resource companies with high debt have been unfairly punished this year, Equal won’t be one of those once this review is concluded. Don't forget they can also use a DRIP, all Canadian