Obsidian Energy Ltd T.OBE

Whitecap-XTC purchase

[Hendrick3]

They paid 1.7 billion for 32,000 flowing barrels, ratio of gas to liquids similar to OBE. If this was Obsidian it would translate to $17 per share not counting that OBE is above 32,000 bbls per day, huge tax pools etc. seen as an excellent deal for WCP so it just shows how massively underpriced OBE is. This may be the start of another phase in M&A.

[Hendrick3]

Actually I got this wrong. It's XTO first of all and it's a gas play. WCP appears to have paid a premium price but it speaks volumes about OBE's true value. 

[arnolddiver]

Also there are no mentions of tax pool savings from the press release. I'm assuming XTO Canada has $0 since it's jointly owned by Imperial and ExxonMobil. Since obe is more oil than natgas compared to XTO, I would think our takeout price compared to this comp is $24-26usd/$31-33cad when you include obe's tax pool value. I would think liquids is more valuable than natgas.

[fullyautomatic]

WCP is going to get murdered tomorrow. I'm only a bystander on this hence why I won't post on the WCP board but yikes... interesting and strange move by WCP this is the best deal they could find?

[kavern23]

Fully, this is an unique situation and like an auction all it takes is two bidders. Crescent Point, Arc Resources, and Srathcona Resources likely all took a look at the XTO assets. Cresecent Point probably would be most desperate to get this and likely made WCP pay what they did. It is very very high quality asset.  Stuff like this doesnt come for sale often.  Imperial had the money to

[kavern23]

And you can add potentially paramount although they would likely stop at lower price.  5 solid bidders on this asset package easily.  CPG must have went to 1.5 or 1.6b.  They are histrorically an agressive bider when they want assets.  Lol thanks CPG. Obe is going to have to be the Cardium consildator if want too see M & A stuff.

[JohnJBond]

3.3 X Next 12 months FFO is not a big number.    3.5 is the peer average  They went to 3.3x 2023 FFO Not a big number  Seems to me that's what the vendor would want to agree to the sale 

[Tim14235]

In terms of OBE being the consolidator, I think you are right.  But they cannot pull anything off until their paper is worth closer to fair value. Unless maybe Baytex wants to buy us with their paper.  And consolidate Peace River and Viking

[JohnJBond]

These companies are now making so much money that they will soon have no debt  After that they either buy or get bought  If you are a CEO who wants to keep his job, you think about buying  If you are a CEO who has other things to do, you think about selling  WCP decided to use their free cash to buy, rather than return it to shareholders - no big dividend for them

[JohnJBond]

WCP says they paid 3.3x 2023 FFO The same 3.3x based on OBEs 2023 guidance would be $35-38 per share for OBE The thing about take overs is they come out of no where  Another take away is the free cash these companies expect to make between now and the end of 2023 WCP states they expect to have 1.3 billion in free cash to reduce debt by end 2023  That's 1.3 billion