Novus Energy Inc NOVUF

Interesting tweet by Andrew McCreath BNN

[Pokerchamp]

Andrew McCreath‏cedarbush5h

NVS has no rigs booked for the 2nd half of '13? seems odd for an oil producer- perhaps co figures they won't be around? time will tell BNN

[Marlbank]

That's VERY interesting for a company that needs to punch 60 wells in the second half. Can anyone confirm if this is true? Or if not having rigs booked at this point even matters? 

[PorkChop22]

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[Pokerchamp]

How do you know it's false?

[counterintuitive247]

I'd think it be business as per usual and initiate a plan to drill 60 wells is probably happening.  From reading their Q1 sounds like alot of wells are slated for their flaxcombe area so could be very interesting what kind of production they get since thats a higher yeilding viking pool .  They have to keep the company operating incase a sale takes another 6

[Pokerchamp]

You may be right, but if the deal is close to closing and the acquirer wants to make his own arrangements and not be tied down by Novus' rig contracts they may not have booked for Q3.  With all the rigs available Novus  could no doub get rigs on short notice if necessary.

[Marlbank]

If the tweet is true, then something concrete must be on the table. Even if management can get rigs at any time it chooses, why would it voluntarily put itself under presumably immense pressure to get such an active drilling schedule in place? Should a sale not go through, NVS will need to appear substantially more on the ball going forward, and you'd have to think no sane

[Pokerchamp]

I can't see a BNN reporter posting information that is untrue.  The conclusion one would draw from that info is also pretty clear.  The deal must be a better than 95% certain and probably in the next week or two. Now the question is how much.

[3dollar]

my guess is $1.20

[Marlbank]

I believe it's true, but I'm still not certain how relevant it is because I am not aware of the lead time needed to get the drilling schedule in place. We can only presume it should have been underway. But, Pokerchamp, the odds look good in our favour. I agree with 3Dollar that the bid should be about $1.20, or roughly 4x 2013CF. Fingers crossed.  

[Pokerchamp]

A $1.20 figure only assigns a value of $77,000 per barrel valuation taking their det into account and using 4060 boe/d  Doesn't that seem low? Using a $90,000 a barrel reults in $1.48 sp.  I still think we'll sell closer to $1.50 than $1.20.

[Marlbank]

I know, I know, $1.20 seems to undervalue NVS. But stock market or garage sale, it's only worth what someone will give ya.  

[sherbrooke1]

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[counterintuitive247]

Are we all talking 1.20 per share plus debt?  I would be very happy with a total allin take out price of 330 million. 1.63 for the company. 1.20 for a shareholder (36%) on todays share price.

[ardvark11]

fare value is 1.50 to shareholders and 0.40 to debt so 1.90 total for current production.