Kelt Exploration Ltd T.KEL

#1 WTI $81, Kelt $6.15

[PabloLafortune]

This is my amateur opinions and guesses

#1  Why? Because they drilled natural gas wells without proper hedges and natural gas prices in Alberta and BC are severely depressed at the moment. Not unlike the US, it will take time to rectify the situation although the commissioning of LNG Canada will certainly help. And like in the US, stock prices will eventually recover some (ex Antero was unhedged and SP went down to $19ish and is now $33).

Hopefully they learn their lesson not to drill wells that are predominantly natural gas without having hedges in place especially when you have the triply whammy risk of HH, AECO and Station2. (to add insult to injury they actually borrowed to do so).

#2 That said, the potential in Alberta is sky high IMO. They're doubling plant capacity from 116 in early 2023 to 241MMcf by 2025?  Most of that (all?) will be filled with NG from liquids rich wells which means more oil and more overall production per MMcf of plant capacity.  Morever, when they interconnect Wembley and Pouce Coupe, they'll be able to replace gassier production decline with production from oilier wells which will mean more oil and more production.

(In theory if every plant was fed with natural gas from wells that produce 40% oil, the boepd capacity from 241MMcf of plant capacity would be 66,000 boepd (26,667 bpd of oil. I'm thinking this is actually a metric that should be measured to see how effective your operation is).

#3 Kelt has done a wonderful job acquiring and developing the plays. Whether the management can get the job done operationally remains to be seen.  If they continue to ignore the commodities' price reality and invest in weaker ROI wells, AND don't opportunistically hedge, then they'll eventually have to sell (which is fine too).*  Plus they might want to do something about this SBC business.

GLTA

* right now due to low NG prices, they probably need to add some oil hedges is my guess to protect the cashflow and not end up like Birchcliff (paying something - capex in Kelt's case, dividend in Birchcliff's - you can't afford because you had no hedges in place - resulting in debt going up)

[MyHoneyPot]

Your talking about a company that esentially has zero debt, and they underspent their capex in the first quarter.  I would give these guys a lot more credit, and expect big things in the coming months, they are not amatures, their professionals and have 140 million dollars in this company of their own money.  If they had more processing capacity they would have more production, this

[MorganEarp]

Uuuuuuhhhhh ya oil up ~$1 like you state....Kelt closed at $6.11 down 4 cents.....No biggie there. What I do have a problem with is in approximately SIX MONTHS TIME.....this stock is actaully even. Yet you go on and on...well you seemed to have slowed down on we will see a doulbe in Q1 2025. On a day like today with oil and nat gas bth up...I would think the dump patrol...read Insiders must have

[Trapped]

He's wrong of course. As an investor, he's too emotional and prone to confirmation bias and black-and-white thinking. ARX has made me a fortune and $30+ looks extremely likely with Attachie Phase 1 (currently right on time and on budget) coming onstream in Q1 2025. The FCF will be prodigious. KEL is a great company and I continue to hold. But to trash an extremely well-run company and

[PabloLafortune]

I have faith and It takes a lot of it when the top 6-7 Managers to a T - excluding David Wilson and Sadiq - kept very few (less than 5%) of the options they exercised.  It seems they all felt there were better investments elsewhere or had personal use for the after tax proceeds. Not to mention the negative impact this has on the share price of a stock that doesn't have a lot of daily

[MyHoneyPot]

I think you should look on page 44 of the current presentation, this management team . They own more that 32 million shares, not counting options and RSU's. That alone is about 200 million dollars.  They have about 5-6 million options including RSU's. We have shareholders here talking about 5 thousand shares sold, they are totally offside.  Management insiders own about 20

[gassygeezer]

Perhaps that 5.75% Tangerine rate/opportunity cost in their collective opinions made better economic sense? 

[MyHoneyPot]

It beats the dividend on ARX, most of they holding by officiers are in kelt actual shares and 20% of their holding are options.  Many of these options have expirey dates. So they needed to be sell.  MHP IMHO

[MorganEarp]

MHP who gives a flyhing f u c k about ARX....we are annoyed with your $12 a share by the end of 2024 PUMP b.s. Meanwhile this pig flounders at under the price from December of 2023!!!  As for the five thousand shares you pointed out, that was just a synopsis of a bigger cancer. If you would like I will psot all of the insider DUMPS....if that would please you more....F.F.S!!!!!

[MyHoneyPot]

Really Officers control almost 40 million shares, 20 percent of the company and someone sells 5,000 options and you say their dumping the stock? Are you for real?  The current price target on my TD waterhouse account is $8.75 with on analyst with a $10 dollar price target.  So your claiming to know better that all the Analysts, and i have spent a lot more time tracking Kelt and

[MorganEarp]

You said..."you understand what common sense is?" Indeed I do Foghorn Leghorn, you loud mouthed schnook, running amok rooster. Pumping this thing like John Holmes movies. You are pathetic with your $12 targets and we are less than in Decenmber due to likley farm off. As for the five thousand shares dumped...If your memeory can recall I said it is a synopis of a bigger cancer and asked if

[Trapped]

Lol he can't help it! He's obsessed with ARX and trashed it constantly on its SH board before he got shamed into leaving. They still refer to him there as 'He who shall not be named."

[MyHoneyPot]

This is great insight, but a lot of the free liquids is extracted in the field. Charlie Lake at Wembley, the well that just came on is 78% oil/NGL's and only 10% associated water with the production.  A lot of free liquids will be removed prior to the gas production even arriving at the plant. The plants in the area are dealing with liquids ratios of 20 boe/mcf - 60 boe/mcf being