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Bullboard - Stock Discussion Forum RMP ENERGY INC T.RMP

"Iron Bridge Resources Inc, formerly RMP Energy Inc is a crude oil and natural gas company engaged in the exploration for, development and production of natural gas, crude oil and natural gas liquids in Western Canada."

TSX:RMP - Post Discussion

RMP ENERGY INC > looks like bottoming
View:
Post by Justreality on Aug 29, 2017 6:10pm

looks like bottoming

The other one would be I just mentioned, which is probably a lot more interesting as of late, is RMP (RMP-TSX). This is probably one that you probably couldn't find a more bearish sort of overhang on in terms of apathy. But the thing that I think becomes ... 

Well, especially with the stock having get nuked over the last week which starts to become interesting at these levels, is basically you look at the real estate that they're sitting on, that Gold Creek Montney, you think about the general trend, you got New Vista there. Seven Gen to the south. But more so the privates, it's CIOC and velvet which are two private entities that are ... Both have mass land positions immediately adjacent to RMP. So, all that we've seen in the last 12 months is just more definition to this trend, or at least confirmation that there is a very attractive resource play emerging here. And one data point you can throw in is like where Kelt sold a piece of land in that fairway. I think is was the CIOC, confirmed, but it was like about $100 million disposition for about 1,000 barrels a day. So, you look at the market cap of RMP today. 

I think the and value ... If they can get some nominal proceeds for Waskahigan you're paying about ... Well, if you put $1,000 an acre which call it defined acreage is ... You're probably paying $1,500 to $2,000 an acre to the fairway. If you put $1,000 an acre, it's probably worth 70 cents. Put $1,500 an acre, it's probably worth 80 to 90 cents. The stock's trading at 34 cents today. I guess the risk is this management team continued to push into trying or basically lever up to ... Well, to try and deliver that production growth or actually make this a real company. But I think the reality, the outcome of this is it's going to be owned by one of these privates. It's just interesting competitive tension on a piece of real estate that its peer group is continuing to get better results out of.

.: Any thoughts on what they'd get for Waskahigan?

: No. It's hard to say, but it is pretty steady cash flow. Even if you're not paying for the inventory, you run on strip with the operating net back at 5X, five times cash flow. It's 80, 90 million bucks and that's basically the enterprise value of the entity today. Right? 

We're talking a market cap of 65 million and debt is that $25 to $30 million. So, there's probably a good scenario where they can sell Waskahigan for most of what the enterprise value is today. So, you'd be left with call it an interesting fairway of land with net cash. If they were to sell Waskahigan which I'm not sure that's necessarily in the cards, but anyway, it's just interesting optionality at these levels.

Comment by auburn2 on Aug 29, 2017 8:06pm
Who said that? The thing is, there's a discrepancy between private valuations and public valuations. The private market is so much less liquid. Putting RMP up against TGL, it doesn't look undervalued. "RMP’s average daily production in the second quarter was 3,556 boe/d (weighted 32% crude oil and NGLs)." Frankly this is really poor and I believe they're basically choking ...more  
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