Gear Energy Ltd T.GXE

thoughts...

[kavern23]

I think Gear is lucky to get this deal.  Their core properties are getting old and quite frankly in 2025 commodity price band...old assets and lower oil prices and being small is a bad combo to try pay a divy. this deal should pass easily for Gear.

But it is actually understandable on why company wants to start a newco.

Let's say Gear's central alberta  belly river or tableland light oil have good drilling locations with new tech on drilling...why would you want to develop and drill this plus have a mix of older heavy oil wells?
market is never going to value that well.

MIXING HIGH RECLAIMATION assets (old hevay oil) with new wells is a BAD IDEA.

Mixing old assets with new exploration plays doesnt do good right now...go look at Bonterra as an example of a company trying to do this.

The positive is Gear must have a pretty decent play they want to drill...my guess is belly river.
Some of the belly river in central alberta by peers have produced fantastic results. Tableland looks so so but maybe new tech can drill even longer wells.

gear couldnt last another 3-5 years in it's current state as it hasnt been spending the capex over the last 5 years in gettng new plays and reserves.

Look at cardinal energy....they are pushing hard into Sask SAGD as at some point CJ old legacy proprties woudnt cashflow as well.

Paying divys is hard in oil patch...you have a constant depleting reserve base.

[kavern23]

Let's pretend Newco has 4 central alberta belly river wells that could produce 200 barrels of oil (ipo 365 days) that could be drilled from one pad. Why would you want to mix this high netback light oil with lower royalties for first 5 years...with lower netback old vertical heavy oil wells? Market will never value that well being in a mismash of assets. Unkown question is the quality of

[houbahop]

Yeah, without that deal GXE would have traded down to a few pennies, lol!