Obsidian Energy Ltd T.OBE

Entrada...

[kavern23]

I have talked alot about it but I have never done the obvious...I ran it's Oct production.

I have have them at 1400 barrels of oil per day. 1500 BOE of NG and 600 NGL's for a total of 3500 BOE.

Lower then I thought.  Covid was really hard on them.

Non flush I have them at about 2800 BOE.

Be a neat company to buy as only around 90 wells.  Be low reclaimation...Willy is that way...isnt much non poducing in Willy.

Entrada is for sure worth way lower then 100M...

70M is probably good ballpark estimate.

They used to be a 5400 BOE company.    They are going to find it very hard being so small.

They can afford to drill the 20-30 wells per year that are really needed to grow.

I wonder if OBE offering 10M shares at 4.75 plus borrowing 40M would get it done...could we even borrow another 40M if getting good assets....

[kavern23]

Made a typo in borrowing 20m not 40m. Any deal that OBE likely does...they will borrow only the amount that the new asset will fcf in that year. Like PROP. If they were to get Entrada I am sure they would want the amount Entrada could FCF would cover any debt taken on to do it. Possible to do small deal like this and not change the dividend timeline for the company.

[JohnJBond]

OBE won't be buying anything else until they start paying a dividend and have a much higher share price  At that time the purchase will be paid in cash or shares 

[kavern23]

Depends on what the payback period on the assets bought.... PROP was an unexpected buy  because it made sense this way. The smart companies seem to be able to do both...raise divys and buy growth. Look at whitecap's strategy. OBE needs to be a stable 30000 plus BOE to start thinking of a divy. If OBE is going to do a buy it is likely from now until Jan 31...sometime before we get new

[JohnJBond]

You only use paper to purchase if it's accretive  Otherwise you use debt OBE has no access to debt for acquisitions presently  PROP was an exception