Packer16 Posted September 26, 2015 Share Posted September 26, 2015 It would be nice to see the sources for his numbers as I have not seen recent transactions anywhere near these numbers. Also have you looked at this guys other posts like predicting a giant rebound in oil prices by 2016 and being stopped out after investing $1 million in PWE in November of 2014. Packer Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 I am not going to enter an argument about someone I am not related to but as far as I know his reasoning about oil prices is that they can's stay in the 40s too long and that 50+ is a minimum. 60+ is the long term trend with a preference for 70s in 2017 and beyond. That's his predictions but these are not the thoughts of someone insane. I personally believe that Russian production has peaked, that Saudis have not spare capacity, they just stimulated as much possible when oil was at 90+ and have higher depletion rates than recognized, Iran will need 5 years just to get back where they were pre-sanctions and american production is falling much faster than thought... I think we are dancing at the edge of some steep slope to be honest but that's just my thoughts... About property/asset sales: The sale of Mitsue in Sept 2015 was for 43000$/boe/d: From PWE web site and announcements: " The following are some of the key metrics and implied transaction multiples for the Mitsue properties for first half 2015: Production 4,500 boe/d Liquids Weighting 78% Operating Cost $29.00/boe Field Netback $8.50/boe Implied Production Multiple $43,000/boe/d Implied Net Operating Income Multiple 14x " This was one of the weaker assets in PWE's non core list. July 2nd 2015, Cresent Acquires swan hills producers Coral Hill (3.2K bpd) for $258m... is that 82K per flowing?... Nawar uses less than 55k (40k to 50k depending on the scenario) for PWE's swan hills assets that are of less perf and for the sake of being more conservative. I also heard him saying he increased his already large position in the last few quarters and yes he is in for more than 1M shares. Link to comment Share on other sites More sharing options...
plato1976 Posted September 27, 2015 Share Posted September 27, 2015 Say oil and gas stay at today's level, what's BXE's fair value in your opinon? If it did not have the economics it has in the Spirit River or started oil drilling today, I would be concerned but the economics going forward along with Orange & Baupost provide more comfort. They are in the process of selling non core assets to reduce debt in addition to using CF from Spirit River to reduce debt. The sub debt is trading north of 85 at this point unlike other more stressed names. The other 2 names are much less levered and more attractive to those who do not care for companies with much debt. Packer Link to comment Share on other sites More sharing options...
argonaut Posted September 27, 2015 Share Posted September 27, 2015 Hi Packer, Did you decide to invest in gear and rmp as part of a basket with bxe or additional standalone interesting choices... Or both? I tend to just have one stock in each industry unless there is a pretty compelling opportunity to have more. Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 I am not going to enter an argument about someone I am not related to but as far as I know his reasoning about oil prices is that they can's stay in the 40s too long and that 50+ is a minimum. 60+ is the long term trend with a preference for 70s in 2017 and beyond. That's his predictions but these are not the thoughts of someone insane. I personally believe that Russian production has peaked, that Saudis have not spare capacity, they just stimulated as much possible when oil was at 90+ and have higher depletion rates than recognized, Iran will need 5 years just to get back where they were pre-sanctions and american production is falling much faster than thought... I think we are dancing at the edge of some steep slope to be honest but that's just my thoughts... About property/asset sales: The sale of Mitsue in Sept 2015 was for 43000$/boe/d: From PWE web site and announcements: " The following are some of the key metrics and implied transaction multiples for the Mitsue properties for first half 2015: Production 4,500 boe/d Liquids Weighting 78% Operating Cost $29.00/boe Field Netback $8.50/boe Implied Production Multiple $43,000/boe/d Implied Net Operating Income Multiple 14x " This was one of the weaker assets in PWE's non core list. July 2nd 2015, Cresent Acquires swan hills producers Coral Hill (3.2K bpd) for $258m... is that 82K per flowing?... Nawar uses less than 55k (40k to 50k depending on the scenario) for PWE's swan hills assets that are of less perf and for the sake of being more conservative. I also heard him saying he increased his already large position in the last few quarters and yes he is in for more than 1M shares. If they could get 192M for Mitsue they can get 300+ for Swan Hills after assuming additional discounting just for the sake of it. And the what about NE BC & NW AB (8000 boe/d), East Central AB (7000 boe/d), Weyburn, PROP and other properties... they may get 1B for all this. The remains the 54k of core production that's still profitable at 40$ (their data). Cheers. Link to comment Share on other sites More sharing options...
Cardboard Posted September 27, 2015 Share Posted September 27, 2015 "It would be nice to see the sources for his numbers as I have not seen recent transactions anywhere near these numbers." It would be nice Packer if you could post examples of recent transactions at low prices because I have not seen any. Cardboard Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 http://www.morningstar.co.uk/uk/news/142447/us-oil-production-fall-will-be-worse-than-markets-expect.aspx US production about to fall more than expected? :o Link to comment Share on other sites More sharing options...
Wilson-TPC Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... Link to comment Share on other sites More sharing options...
Wilson-TPC Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Alright if you say so... I do not like to argue too long to be honest. 15K to 45K per flowing on non core assets is conservative given the numbers you just gave however... and these are the numbers presented earlier. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... And for god sake, at least get your fkn facts straight. http://www.prnewswire.com/news-releases/penn-west-announces-sale-of-mitsue-properties-for-1925-million-527655851.html It would really be a shame if you made a miscalculation cause you got the exchange rate wrong. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Alright if you say so... I do not like to argue too long to be honest. 15K to 45K per flowing on non core assets is conservative given the numbers you just gave however... and these are the numbers presented earlier. Arguing? Dude, check your numbers. It's one thing to be delusional, it's another to be FACTUALLY WRONG. Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Alright if you say so... I do not like to argue too long to be honest. 15K to 45K per flowing on non core assets is conservative given the numbers you just gave however... and these are the numbers presented earlier. Arguing? Dude, check your numbers. It's one thing to be delusional, it's another to be FACTUALLY WRONG. Nice catch you are right on this one. It is still above 1/2 of fire sale prices... Anyway, I am not trying to argue. This equity still looks grossly mis-priced to me. Link to comment Share on other sites More sharing options...
Wilson-TPC Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Alright if you say so... I do not like to argue too long to be honest. 15K to 45K per flowing on non core assets is conservative given the numbers you just gave however... and these are the numbers presented earlier. Arguing? Dude, check your numbers. It's one thing to be delusional, it's another to be FACTUALLY WRONG. Nice catch you are right on this one. It is still above 1/2 of fire sale prices... Anyway, I am not trying to argue. This equity still looks grossly mis-priced to me. I agreed it's mispriced. Using Mitsue sale metrics on the whole company, PWE stock should be worth 3.4 ish Canadian. (91,164 * 43,000 - 2,205,000,000) /502,000,000 = 3.41 The problem is SELLING the WHOLE piece. That's always problematic. Link to comment Share on other sites More sharing options...
goldfinger Posted September 27, 2015 Share Posted September 27, 2015 Guys, everyone is on the same page here. Packer and I have just as much vested interest in Penn West being able to sale acreages in these plays at C$70k flowing boe/d. That would be amazing if we see those kind of multiples. Unfortunately, we won't. I am long in BXE and Gear, but that doesn't make me delusional to reality. These multiples are very high. If you slap these cardium multiples on BXE, I wouldn't even know what to do with myself other than to disbelieve. Not to mention, BXE also has Duvernay! I REALLY HOPE you guys are spot on. My conversation with the people actually doing the M&A in Alberta leads me to believe otherwise. In the next few months, we will start to see M&A pick up. There will be a lot more deals announced by the end of the year. Until then, everything we do here is a guessing game. Who talked about 70k per flowing for PWE's non core assets??? In Nawar's fire sale spreadsheet most assets are in between 15K and 45k per flowing. All lower than Mitsue that has 8.5$ netback/barrel and 29$ operating costs - more than 2 to 3 times worse than most PWE producing assets... I calculated that if Roberts suddenly woke up one day in the current environment and decided that the company would die if he didn't sell it immediately and was putting it for sale at fire sale prices on the fire sale prices already - let's say 1/2 of fire sale prices, the market cap would still be twice today's market cap... Also I do not know why you ignore Mitsue's sale: it happened this month at 49K$ per flowing or close to 65K C$ per flowing for assets with 8.5$/boe netback. This is not speculating or guessing or what not, it is what happened a few weeks ago in the field... What about Crescent acquisition in July 2015 in Swan Hills at 82K$ per flowing from a previous post? These are actual tangible facts - Do not take it badly but I wonder who is being vague and playing the guessing game (discussions with M&A people) and who is being real (actual public transactions)? There are lots of companies like CPG, CNQ, Suncor etc... for example that are sitting on lots of cash and need to think about getting assets they can produce profitably in this environment. Oil sands and other more expensive products won't do it... I cited the Cardium assets being valued at 70k per flowing boe/d. Crescent's acquisition is now NO WHERE NEAR 82k flowing because it used EQUITY. Check the stock price, you might be surprised. Like I said earlier, if you talk to the people ACTUALLY doing the M&A, you would have gotten the answer, "Crescent used its overvalued stock and overpaid." Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves. I don't know where you get your optimism from. You cited one deal that was severely overvalued, Crescent stock price since has taken a bath because of acquisitive style, and you tell me i'm guessing and citing crap. I think you should call up the oil and gas executives in Alberta and ask around what you think a fair price in the current environment is. Here are some people you should call: Darren Gee Don Gray Ingram Gillmore Ray Smith Steve Toth Maybe they can shine some light on you as to what an appropriate per flowing boe/d valuation is. In times like this, it's much better to be conservative. Alright if you say so... I do not like to argue too long to be honest. 15K to 45K per flowing on non core assets is conservative given the numbers you just gave however... and these are the numbers presented earlier. Arguing? Dude, check your numbers. It's one thing to be delusional, it's another to be FACTUALLY WRONG. Nice catch you are right on this one. It is still above 1/2 of fire sale prices... Anyway, I am not trying to argue. This equity still looks grossly mis-priced to me. I agreed it's mispriced. Using Mitsue sale metrics on the whole company, PWE stock should be worth 3.4 ish Canadian. (91,164 * 43,000 - 2,205,000,000) /502,000,000 = 3.41 The problem is SELLING the WHOLE piece. That's always problematic. If they can sell non core assets are prices even lower than our fire sale estimates, immediate concerns about debt would disappear and remaining production (core) would be not only profitable at current prices but also optimizable (following the current optimization procedures - 5 - 10% cost reductions?). So that survivability is not a concern for a few years at least. They will become one of the very low costs producers in their respective regions. Who survives at 40+ for a few years is one question? They can also merge the company with another one as a last resort solution. Link to comment Share on other sites More sharing options...
SharperDingaan Posted September 27, 2015 Share Posted September 27, 2015 You may want to keep in mind that with all the current layoffs, Alta senior executives are pretty depressed. It is a short term view, that sees the glass as half empty. Give them six months of modestly higher prices, & the song sheet will be very different. The recent big layoffs at the servicing companies are also hard evidence that US oil & shale drilling will be minimal this winter. That production decline from high depletion rates on existing wells is not going to be made up from new wells; all else equal, there is going to be less swing production - & higher prices. Nawar also just needs to be right once, there is no money to being a correctly predicting talking head. SD Link to comment Share on other sites More sharing options...
Cardboard Posted September 28, 2015 Share Posted September 28, 2015 "The problem is SELLING the WHOLE piece. That's always problematic." Who said that we were looking to sell the whole thing? We are talking about selling non-core assets at conservative prices which has been the history all along to reduce debt and costs in order to get a proper valuation for the core. By the way, you should check your language. You too made a mistake before with exchange rates that I pointed out and did not care to acknowledge. Cardboard Link to comment Share on other sites More sharing options...
Cardboard Posted September 28, 2015 Share Posted September 28, 2015 "And for god sake, at least get your fkn facts straight." I would like for you to do the same. Where is that coming from? "Mitsue was 43k per flowing in Canadian dollars and 39k according to the buyers because they expect to grow reserves." So a factually wrong statement based on Cardinal Energy`s Material Change Report and I would say illogical: Since when do growth in reserves impact current price paid per flowing boe? "On September 15, 2015, we entered into an agreement (the "Acquisition Agreement") with a private company ("PrivateCo") and an unrelated third party (the "Vendor") pursuant to which we agreed to purchase a 75% interest and PrivateCo agreed to purchase a 25% interest in certain strategic light oil assets focused primarily in the Mitsue area of Alberta from the Vendor for an aggregate purchase price of $192.5 million. Our share of the purchase price for the assets to be acquired by us (the "Acquired Assets") will be approximately $129 million after estimated closing adjustments and the sale of a midstream asset to be acquired pursuant to the Acquisition, which we and PrivateCo plan to monetize concurrently with or shortly after the Acquisition (the "Disposition")." The statement from Cardinal proves that Penn West said the truth in terms of overall price or $192.5 million. "In summary, the highlighted benefits of the Acquired Assets and the Offering for us are as follows: the Acquired Assets are currently producing on average 3,300 boe/d (78% light crude oil and NGLs) with a production decline of approximately 10%;" That statement from Cardinal also proves that Penn West said the truth in terms of price per flowing barrel: 3,300 / 75% = 4,400 boe/d (not being exactly at 4,500 boe/d is likely due to rounding) And here is how you end up with the stated acquisition price from Cardinal which is post the midstream asset sale: $129 million / 3,300 boe/d = $39,091 boe/d Cardboard Link to comment Share on other sites More sharing options...
goldfinger Posted September 29, 2015 Share Posted September 29, 2015 China oil demand may be completely misunderstood by the markets according to Jefferies: http://www.bloomberg.com/news/articles/2015-09-29/jefferies-china-s-demand-for-oil-is-totally-misunderstood-by-the-market "The composition of Chinese oil demand has shifted, reflecting policymakers' attempts to rebalance to growth driven more by domestic demand, rather than infrastructure projects fueled by subsidized credit." "We also believe China's privately owned vehicles are starting to be driven more after spending years as parked trophies of middle-class aspiration," Link to comment Share on other sites More sharing options...
Novak Posted October 1, 2015 Share Posted October 1, 2015 Penn West Announces The Sale Of Its Non-Operated 9.5% Working Interest In The Weyburn Unit For CAD$205 Million http://pennwest.mediaroom.com/index.php?s=27585&item=135258 They also announced a reduction in their full year production guidance by 2,000 boe/d on the top and bottom-end, to 84,000 - 86,000. I'm very happy with the price. In November 2012, when oil was around $110, they sold an 11.7% NRI in Weyburn to Franco-Nevada for CAD$400. Since then, oil is down 60% but the sale price per percentage is down about one-third. Not bad for this environment. I'll note that the CAD$205 million is between Nawar's "fire sale" pricing estimate and his base estimate (much closer to the fire sale price). This moves their total debt nicely below the CAD$2b - somewhere around CAD$1.8b. Seems like a nice little bit of additional de-risking. Link to comment Share on other sites More sharing options...
aws Posted October 1, 2015 Share Posted October 1, 2015 More good news for the market to ignore. I hope Nawar's estimation on the impact to the share price is as close as his selling price estimation, but I don't hold out much hope of that: an additional $200m asset sale will push this stock back to $2+ CAD Can someone clarify what the effective date of July 1 2015 for the sale means? Does that mean all cashflows from that interest for Q3 will get transferred to the buyer? How will this and Mitsue be reflected on the Q3 financials? Link to comment Share on other sites More sharing options...
Cardboard Posted October 1, 2015 Share Posted October 1, 2015 That is right, the effective date is when sales and costs transfer to the buyer. I don't think that these sales can be ignored much longer by the market. The last two have both been done at solid metrics for this environment. The resulting EV/boe/d, keeps coming down with both. And with both assets being non-core and at higher operating cost (when you add the capitalized cost at Weyburn), you end up with a company in the not too distant future with a production level and profitability level that can support its debt like the best in the WCSB. They have done more than the banks and notes holders have asked for, so we should continue having them on our side. And as I mentioned on the Gear Energy thread, our bank line cannot be reduced until May 2019 based on reserve values unlike most producers. Cardboard Link to comment Share on other sites More sharing options...
Packer16 Posted October 1, 2015 Share Posted October 1, 2015 I think these deals are good news for all who are investing in this space. Cash is still being paid at nice multiples for some of these properties. Packer Link to comment Share on other sites More sharing options...
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