Whitecap's acquisition today goes to show you how coveted this play is right now. If you worked the math comparatively:
WCP paid $300MM for Kicking Horse:
- 8,000 BOEPD
- Undeveloped Land
- W/ partial completed wells.
= $37,500 per 'current' flowing BOEPD
*Keeping in mind that they're applying $75MM in capital expenditure to get the asset to 15,000-18,000BOEPD
ARX paid $2.7B + Debt for Seven Generations:
- 185,000 BOEPD
- Similar geographical position in the play to Kicking Horse Oil & Gas
- Seven Generations has more undeveloped resource pound for pound.
- Enhanced marketing and infrastructure
= $26,000 per 'current' flowing BOEPD based on full enterprise value.
No matter how you're seeing this acquisition... using rough math, the combined entity is undervalued by 45% before you take into account any of the value attributable from size and scale.
ARC/VII should be worth $11.50 before you even have to dig in.
My thoughts only.