Kelt Exploration Ltd T.KEL

Montney Wembley Capital efficiency

[PabloLafortune]

Q3 report wasn't great overall due to the 3rd party plant delay at Wembley. But a single sentence made it worthwhile: Kelt reported D&C costs of C$6.3MM @ Wembley.

Per 2023 reserves report, the EUR is 1M down around 10% from before when IP365 was listed on the presentation @ 820 boepd IIRC. So assuming 740boepd, we get a capital efficiency of ~$8500 (usually measured as well cost / IP365 boepd).

Now caution should be exercised because this doesn't include equipment and tie-in and the IP365 assumption I made. Nevertheless, I believe this is very good considering 47% liquids.  Also, there are savings to the fact that there are 2 zones, potentially 3 that they can leverage for equipment, etc...

Why the ... because its amateur hour and I could be off base.

Good luck to all.

IMHO

[MyHoneyPot]

I always respect your analysis, and it is good to have different views regarding the same opportunity.  That single sentence resonated with me as well, but it was more from the perspective of the ability to recycle capital. I have seen many investment decisions in companies based on how quickly the capital deploy was returned, so that the capital could be recycled and redeployed it in

[PabloLafortune]

Crazy idea of the day: Merge kelt wembley with POU sinclair with aav on the ab side, and oak/vet/coelancth on the bc side. Would create a behemoth, reduce from 5 to 2 management teams, 370,000 acres in bc, 300,000 acres in AB, own deep cut plants (EQT acquired their related party Equitrans recently, cost structure went way down), own drilling, own infrastructure, ownership in LNG.

[MyHoneyPot]

Its a great idea, and they has enough cash to do it.  But POU has 1.3 million acres or more in Cavalier, and there are a few treasure in there that i know of, that could be funded all on their own. However Not in cavalier but on POU's presentation is the Liard/Hornriver basin is a massive prolific play, with endless resource. One of the top ten gas basins in the world.