Post by
drunk@noon on Feb 29, 2024 11:28pm
Rig count down, doesn't matter. The rigs drill wells faster
they use more of their product each day. I.e if a well that use to take 20 days to drill is done in 10 more or less takes the same amount of fluids. Thus the lack of significant drop off. Their is some difference, but their gain in market share made up for it. When next round of lng terminals kick in (a year from now) 5-6 bcf per day in the US and 1.8 bcf/d in Canada the rig count will jump and with it the great goes to really great. 20% plus free cashflow will bump up to the 40's. Also of not working capital exceeds total debt. i.e no net debt from an intinsic valuation point of view. Half of cap ex is devoted to growth. So maintance cap ex next year is 8.5 mill a quarter. maintance cap ex in q4 was 3.5 but assume it was 8.5. Q4 funds from ops was 68.5 milion that's cashflow before the eb and flow of changes in working capital..Maintance cap ex was 3.5 in q4, but if one assumes 8.5 avg runrate of the next 4 quarters you are talking about true free cashflow of 60 mill run rate of 240 mill a year. 24% free cashfow yield . And this when the rig level is at a depressed state. If this is bad, what will good look like.