Kelt Exploration Ltd T.KEL

Add Pouce Coupe - Charlie Lake

[MyHoneyPot]

It looks like While we are waiting for Plant at Wembley, Charlie Lake continues to get bigger, more significant and shows very encouraging results. 

Pouce Coupe Charlie Lake

They just finished drilling some charlie lake in the wembley area with TVE, now new charlie lake production in Pouce Coupe and the reactivation of some shut down batteries, means great economics.

Kelt has a lot of valuable land, and the sparkling clean balance sheet with zero debt, so no interest rate risk and only improved confidence in their resource. 

These guys have been working this area too long and given their AGE, i would not be surprized to see a monetization transaction. 

Kelt one of the cheapest low risk oil and gas property, who just expanded their charlie lake opportunities, and continue to hit doubles and singles, and grind away at that huge land base.

IMHO

[PabloLafortune]

To add my (amateur) commentary: First, its fun to watch Charlie Lake being developed - seems to fit Kelt like a glove. Its oilier, has a quick payback, plus there seem to be some land accumulation opportunities. Second, I note that Wembley appears to be at a similar stage in its development that Cenovus' Pipestone was when the latter play was sold to Nuvista in 2018 for $635M.  And as

[Seppelt]

Page 18 of TVE presentation is showing a map of its holdings in Charlie Lake. Kelt is not seen but there are a few private companies. Would Kelt be interested in making an acquisition? https://uploads-ssl.webflow.com/631b1b5140f68ad05f6927f5/64c1f9d76bdb61250e7862a2_2023%2007%20TVE%20External%20Presentation.pdf

[PabloLafortune]

Expensive proposition. TVE has 159,000 acres of Charlie Lake rights from which they are producing 16,000 boepd (53% oil) a level they can sustain for 10+ years. They paid $500M for what was 12,000 boepd of production and 40M boe of 2P reserves 2 years ago. IMO, you pay that kind of premium for reserves, you have to factor that in to your unit cost. Suddenly its not so profitable anymore

[Seppelt]

Unlike TVE, Kelt has only about 92.000 net acres of Charlie Lake and no processing facilities. Is that enough to contribute to the the overall production growth? If it is such a great play, why not to expand which Kelt can afford. That would make sense if the management had a long term business plan which is probably not the case.

[MyHoneyPot]

I would not say that, and my initial concern with Kelt was capital constrained.  However with zero debt, and the fact that they will have almost zero debt and be producing north of 40,000 boe/day 2024, they will be albe to do more. We need to remember that Kelt had like many others a near death experience, with to much debt and they just don't want to go there again.  I am

[PabloLafortune]

How Kelt rolls is they acquire acreage and they develop them. They don't buy fully developed properties like TVE's Charlie Lake, they do the opposite, they sell them.  Charlie Lake appears to have very good cashflow but much less reserves than the Montney. Its a really good fit for Kelt actually given their large Montney acreage, but not if they pay $12/boe of 2P reserves.