Post by
bshort92 on Aug 10, 2012 10:16pm
The combined entity
With 126 million shares out now the float for Long Run is decent. You got 1.8 million acres including a sizable Montney position I believe over 600 K acres. You look at what Petronas paid for Progress holders of 1.2 million Montney acres, the robust valuation for CLT with 800 k Montney acres you can see that GO's land position was a key part of the deal. Don't forget the combined entity has 100 mmboe of reserves. The WFE Viking effort being led by the "hot frac" technology component can unlock a ton of oil in that area. Once all is assembled in this 50/50 Oil to NG weighted outfit I see potential. The $430 million debt load will have to be reduced through asset sales but with 26,000 boe/d production it is decent risk reward scenario. Bill Andrew is no slouch. He is well regarded in the industry. I think Sprott's equity stake is a positive. Be careful not to overreacct as both firms are currently overleveraged. This is a win win scenario for both sides. If NG prices come back then you can double your money from here.
Comment by
carlson8 on Aug 11, 2012 7:27am
bshort92, that's exactly the right attitude IMO. the metrics are cheap and this will likely turn out ok in good time. i've never owned either stock but bought a bunch of WFE yesterday