Kelt Exploration Ltd T.KEL

How to value Kelt - Sum of the parts.

[Cheadle12]

Lots of discussion on Kelt's upside, here are a few thoughts to ponder.

Kelt has a few operating areas Oak / Flatrock being the largest development area (i.e. Inga 2.0).
Wembley/Pipestone/Valhalla is reasonably mature, lots of non-operated Infra and very saleable.
Same for others, spirit river etc.

Kelt has roughly a $900M Market Cap, EV roughly the same (debt free).

Pipestone, who operates 'only' at Wembley/Pipestone has much less land, more production there and comparable infrastructure.  Pipestone's EV is around $1.4BN, $200M debt, $1.2M Market Cap.

So at $5/share and current S/O, Kelt has a $900M EV.  If Kelt continues to build out Oak/Flatrock (new plant) and more infra, more drilling.. they can build this up very easily to a $1BN Asset.  So where does this leave the Pipestone asset?  Saleable at $1BN given the land/production.   So this roughly then puts Kelt's stock at around $12 / share, given the two 'main' parts.

Kelt's value is in their optionality and in contrast to Wilson's previous ventures, parting out Kelt would offer shareholders a lot of upside.  I do see this as their plan.  Leverage the CF at Wembley to build out Oak, and then sell off the parts, as they did at Inga.  May be wrong, but shows the value of Kelt regardless, having choices is a good thing.

~TGC.

[PabloLafortune]

I was surprised at the price paid for Storm AND the buyer.  CNQ doesn't strike me as the kind of company to invest in an asset as an O&G LNG play.  They're in the business and must believe this particular asset has a lot of upside for them.  Definitely not because of the plant either, they can build those in their sleep I would imagine. Most investors understand that

[InsideEnergy]

ok pablo, you own kel so you mut be able to tell me, who processes the gas iup there and what is the capacity for growth ???

[PabloLafortune]

The same guys who were processing Storm's gas before, is it McMahon? No idea about the capacity but it seems Kelt has put a few contracts to market the gas (station, Chicago, Marcellus and Sumas).   Since its their modus operandi, Its obviously better for the CNQ's and TOU's of this world when the asset they are buying does not have the gas processed by 3rd party. But

[Seppelt]

The main source of revenue from Oak will be oil/condensate and NGLs. Natural gas will be sent to a third party. The co is not planning building a gas processing plant. The CEO made it clear on many occasions and the CFO confirmed it. Like it or not, end of discussion. No point in endlessly bringing up gassy AAV or Storm. The company is already spending a lot on minimum infrastructure to handle

[PabloLafortune]

Comparing with peers is justified.  Ex. PIPE whose 95,000 acres is next door to Kelt's 107,000 Wembley acres, has an updated presentation. Honestly, gives a better sense of the play than Kelt does.

[Seppelt]

I also own Pipe, not as much as I used to but no complaints about its performance. Pipe is also focusing on liquids and all its natural gas is processed by third parties. Their disclosures provide more details while Kelt probably believes it's not important or more secretive. Could be Pipe has only one asset so nothing else to talk. Another difference, if matters, is Pipe management are hired

[PabloLafortune]

You're right of course - (pipe mgmt are ex Sequence). But KEL for example could provide a roadmap to x boepd @Wembley and what the constraints are (pipe, compression, L/H, plant, marketing, wells, etc...) without specific dates so that investors can compare ...but we don't even get current Wembley prodn data. So retail either guesses (me) or base on reputation (well earned) or stay away

[InsideEnergy]

pablo I missed this part where you post it was " definitely not for the plant!!!"  definitely you say, like you know, or were there, as if... maybe it was a facfror, seeing as it occured after the plant was commissioned, not before the plant was built.. maybe it was, but definitely not?  you know that for a definite huh?  cnq was the surpise buyer to you? from what I seem