Pine Cliff Energy Ltd T.PNE

Strategic Acquisition, Update on Fourth Quarter Drilling Prg

[Betteryear2]

Calgary, Alberta--(Newsfile Corp. - December 20, 2021) - Pine Cliff Energy Ltd. (TSX: PNE) ("Pine Cliff" or the "Company") is pleased to announce that it has entered into a definitive agreement (the "Agreement") to acquire all of the issued and outstanding common shares of a privately held oil and gas company for a cash purchase price of $22.2 million, prior to working capital adjustments (the "Acquisition"). The Acquisition further consolidates Pine Cliff's core Ghost Pine area and is expected to close on or before December 31, 2021 (the "Closing Date"). The Acquisition will be paid entirely with cash without the use of debt or issuance of equity.

Acquisition Highlights

The Acquisition will add approximately 1,900 Boe/d (approximately 71% natural gas, 23% crude oil and 6% natural gas liquids) of low decline production and 100% ownership in strategic crude oil and natural gas infrastructure that will lower Pine Cliff's Ghost Pine area operating costs. Pine Cliff has also identified development drilling opportunities in the acquired assets which appear to be comparable to the Company's recent Pekisko crude oil and Mannville natural gas drilling locations.

https://www.newsfilecorp.com/release/108180

[jjgrey]

VERY NICE DEAL! NO DILUTION NO DEBT!! This stock is going a lot higher

[Scotchlight1001]

I note daily production volume is estimated to be 21,000 boe/day (89% gas).This compares to Peyto at 89,000, Whitecap at 102,000 and Crescent Point at 132,000. How much production is needed to sustain a dividend for the second half of 2022? They have not indicated the estimated amount.

[jjgrey]

Scotch, it's not production levels that will determine the dividend but free cash flow per share. As per the new corporate presentation at 3.50 per MCF that would be 18cents per share. The new standard in western canada is to pay out 50% to shareholders. So even if we pay out 25% that is 4.5 cents. At today's 62 cent mkt value that is a 7.25% divy yield. Cheers

[Scotchlight1001]

Thanks. I will take it. When it happens, I will call the stock ‘My little Enbridge’.

[mjh9413]

And pressure on N American natgas domestic supply and prices will continue, e.g. Look at TOU's deals with Cheniere diverting gas from AECO Hub, and then we have four U.S. LNG developers signing 17 deals this year. Venture Global’s 2 to-be-built LNG export terminals will supply 3 1/2 million metric tons of LNG per year (pity it's to China but this sets demand/price impetus

[bandit69]

That's about $11700/flowing BOE.  Not bad considering NG prices today and that they were paying almost 3x this for past acquisitions.  If the infrastructure is strategic as they say then that's always a bonus especially if it'll drop op costs.  and paying cash is a good idea.  Maybe they've learned some lessons.   I wasn't a fan of acquisitions

[TheRexmember]

Huge fan of the deal. Huge fan of the progress this company has made this year.  based on the news release this will add cash flow of about 1 milion per month. Pay out in 20 months without including any upside surprises. Hopefully we get an update in the next quarter  that : 1. lists some cost reductions or synergies they identified  with the assets 2. Find some extra

[snowshoedb]

Great post RexMember.... solid questions particularly about abandonment obligations

[mjh9413]

isn't the gross payback around 8-9months eom