Bowood Energy Inc V.BWD

Legacy JV Analysis

[Barnett_Vet]

I was confused why this sold off yesterday so I did a little analysis of the limited details they gave us in the press release.

On the non Blood Tribe lands Legacy paid $8 million for 16640 net acres, or just over $480/acre. This seems like a good price since this land isn't proven. You can buy leases in parts of the Niobrara for a lot less than that. I am not sure of Bowood's average price per acre, but I bet they made a pretty nice return on that investment.

On the Blood Tribe lands, Legacy will pay 80% of the first two wells. I am going to estimate that the wells will cost 5 million each, which makes a payment by legacy of 8 million for a 50 percent interest in 8 sections, ie 2560 net acres. Based on the estimated well cost, that makes Legacy's acquisition price per acre 8,000,000/2560= $3,125/ per net acre. This is certainly a lucrative deal for Bowood, which leads me to my next question.

If Legacy decides to acquire more acreage from Bowood, stated to be done on a rolling option basis, would the terms of the deal be the same as the first one, ie Legacy paying 80% of well cost for a 50% working interest? That part of the press release was little unclear to me, what are the trems of the option?

Even if the terms of the future option acquisitions by Legacy are the same, I think this is a great deal for Bowood because if the first to wells produce, that should provide some cash flow to help pay for addtional wells with Legacy. Not to mention that Bowood has the potential to get all of the Blood Tribe lands drilled while only paying 20% of the cost while retaining 50% revenue interest.

If all the land ends up getting farmed out to Legacy, then Bowood will still have  58,500 net acres, with 80% of the drilling paid on the bulk of it.

Opinions?

I have been following this for a while and bought in today at .62

[403xyz1]

Legacy Oil + Gas Inc. | Brian Kristjansen, 1.403.691.7807LEG : TSX : C$14.35 | C$1,818.7M | Buy , Target C$15.25• "Alberta Bakken" position additional free option value; reiterating BUY andC$15.25 targetEventLegacy Oil + Gas has entered into a joint venture agreement with Bowood EnergyInc. (BWD : TSX-V : .63 | Not Rated) to farm-in on Bowood’s 183 sections(117,000 acres) of land in

[bandit69]

Legacy has not been around for long but I am very familiar with them. They started around July?? 2009 by Paul Colborne et al.  So, maybe the general retail guy is unaware of Legacy and the people behind it.  Ibankers almost throw money at Paul Colborne and ask him what he can do with it.  Not many people can claim this.  Put it this way, forget BWD as a

[BayStreetkid]

You're clearly NOT very familiar with them...You would know that they were formarly known as Glamis Resources which started off as a Junior Oil & Gas company and listed in November 2006. 

[Bob56]

Seems like odd timing for Anonymous to try and wreck the SP.  ~Fantastic news just released, the CEO out on a road trip to promote the stock.  Tons of blue sky potential waiting to be realized.  Markets up.  Oil up.  Life up..  Things that make you go hmm..

[bandit69]

If you are referring to me then you re 100%  off.  They "were" Glamis Resources.  Glamis was taken over by Colborne and crew because it was a poorly run co and a company for COlborne to turn around, as always.  They did NOT keep any of Glamis management (for obvious reasons) and Legacy was born in 2009, then consolidation occurred soon after and now worth over 2

[Bob56]

Alberta Bakken generates buzz as the 'next big play'Alberta Bakken generates buzz as the 'next big play' By Gary Lamphier, Edmonton Journal December 9, 2010 10:42 AM If you've never heard of the Alberta Bakken light oil play, you're not alone. Although it has gotten some attention in industry publications, it has yet to make a big splash in the mainstream

[Pandora]

Interesting read on Bakken jr.'s: https://oilandgas-investments.com/2010/oil-stocks/the-best-junior-oil-stocks-in-the-alberta-bakken-formation/

[Clint007]

Sure is! But it is the third time that story have been posted here. :)

[Pandora]

Sorry, guess I haven't been reading enough posts.