Post by PabloLafortuneon Mar 05, 2025 9:22pm
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Post# 36481252
Q4 released
Q4 released Professionally run company. Amateur summary:
- upped cashflow projections for 2025 based on higher natural gas strip prices.
- hedges in place (bought put, sold call) protect cashflow. In the money for oil and under for natural gas (due to sky high HH prices atm).
- reserves increased ~10% (247MM 2P). 46% liquids (getting gassier). They don't breakdown oil and condensate.
- The Alliance natgas transportation contract capacity of 120MMcf to Chicago has been extended to 2032...Very lucrative contract. their realization was only a little less than Tourmaline's in Q4.
- They have some debt but the proceeds from stock options (in a transaction) + the proceeds from power sales + '25 free cashflow grosso modo takes care of it seems to me (E&OE).
- they mostly run their own plant so operating costs are $7ish which is much lower than NVA for example (comparable in terms of liquids mix). Combined with selling NG in Chicago, much higher netbacks.
- sold 1 power project in Q1 for $21M and have another one for sale now. No slides on these anymore so presumably its all for sale.
- considering putting the company up for sale.
- the CEO is the founder of Seven Generations (acquired by ARC Resources). In terms of mgmt approach (not too many cheap options, own plant, NG transportation, etc), shades of the book the Soul of a new Machine.
- closest comparable IMO is Nuvista in terms of liquids mix. Kiwetinohk however has much lower operating costs as they run their own plants for the most part, and they have better natgas realization. As a result, netback was $32/boe in Q4 vs $19 for Nuvista.
- Big issue is the stock has no trading volume (some days < 1,000 shares).