Zargon Oil & Gas Ltd ZARFF

North Dakota related

[pablo87]

Acquisition in North Dakota by Petroshale. US$55M for 550 boepd (90% oil), 12M reserves. Reconfirms that Zargon's North Dakota is their best remaining asset. 

https://globenewswire.com/news-release/2018/07/12/1536514/0/en/PetroShale-Announces-Strategic-Acquisition-40-Million-Bought-Deal-Financing-Concurrent-Private-Placement-and-Operations-Update.html

[Cardboard1]

Sounds awfully expensive at $130,000+ CAD per flowing however, only $6 CAD per 2P boe. Remains amazing that Zargon is unable to do anything with its assets. WCS is near $70 CAD in Canada and this property in North Dakota must be generating a lot of free cash flow with WTI at $70 U.S. and no shipment bottlenecks. The hedges were really bad but, they should now be mostly out of them in H2. They

[hawkowl1]

Recent deals in Canada demonstrating it remains a buyers market.  Zargon may not have the best of assets but trading at .43 cents is ridiculous. Insider selling is not helping.  Perhaps Craig Hansen is simply being unrealistic and asking wayy too much. Buyers are likely offering .80 cents per share and Craig wants $1.20? Hedges expired end of June 2018.At least that was what I was

[pablo87]

It is indeed a buyer's market, the multiple on field netback seems to be around 3x?  Eagle bought an asset for $30M 3 years ago and sold it just recently for $13.8M! @$65 WCS ($55 today?) and $82 LSB, 43 cents represents ~2.73x field cashflow. 3x field cashflow equates to 60 cents. 80 cents represents 3.32x cashflow, $1.20 represents 3.92x field cashflow. Drilling down into each asset

[pablo87]

If you believe that mgmt (CH) and the BoD are fiscally conservative (I do), then you have to assume they have more than enough to pay the debentures off.  Primarily/entirely from the North Dakota asset. I believe they are trying to maximize what they can get for the Canadian assets esp Little Bow (which requires WCS at these levels on a sustained basis) but more importantly, sell the whole