Kelt Exploration Ltd T.KEL

Couldn't help myself

[MyHoneyPot]

I couldn't help myself and picked up a few more shares today at $5.61 a steal of a price. 

AFFO per share is $1.76, so that means Kelt is trading at 3.18 time AFFO when i picked up those share or another way to look at it is every share is associated with 31.4% AFFO.

My guess is the reason we have not go an update is that the flush produciton of the Wembley wells, means you have to be methodical in the way you bring them on. Also they were have gas plant issues with on of the other plants before they received access to the addition plant, so they likely had their hands full in the field. Ten additions wembley wells in total will be tied in from 2023 drilling. 

Altagas did announce an expansion late in 2023 for the Wembley/Pipestone gas plant, the million dollar question is did kelt subscribe for additional capacity to what they already have?

2023 was a very active year for kelt but gas prices did not cooperate slowing down oak a bit, and gas plant issues riddled Q3 and into Q4 that will make their year end numbers a little lower than they should of been, but with the rock solid balance sheet it simply means a little delay in production rampup. 

I do think Q1 will be a big Quarter for Kelt and a significant jump in production from the 28,000 boe day Q3 number. 

Going forward at Wembley will now be pad development, so it will result in more efficient lower cost operations. 

The fall off in Kelt price is overdone, and now it is just a matter of patience and all the DUC's fall in line. 

IMHO

[PabloLafortune]

What is attractive to me is the commitment they've made for additional gas processing at Wembley (it was 107 or 109 now that Altagas is doubling then Kelt is essentially taking their share of the expansion I believe) as it implies much higher production levels. And we know Kelt is very conservative so they probably have many wells in their back pocket to fill the plants. We also have the

[PabloLafortune]

Kelt has higher AFF than BIR now, yet BIR despite its drop, still has 60% higher EV. And because Kelt is spending a lot more on capex (due to no debt and no dividends), will probably be much higher next year. However, the pricing Kelt is using is a little higher than BIR (ex $80 WTI vs $75) though. Perhaps they are conservative on oil % (currently 28), NGL pricing, overall volumes or costs? Or