Oil & gas asset sales still being done at high metrics

[Cardboard]

Despite the terrible start for energy this year, some deals are still being completed and at high metrics.

 

On January 11, Enerplus announced a deal to sell assets under two transactions and the large one got completed today at almost $39,000 per boe/d being 97% natural gas:

 

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aERF-2343961&symbol=ERF&region=C

 

While deal metrics have come down since early 2015, they have not collapsed in the same fashion as share prices. One must conclude that industry executives and financiers are approaching deals with a long term view using much different prices that what is currently presented on the spot market.

 

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[nafregnum]

That leads me to ask: Which E&Ps have bargain prices and have the potential to sell off non-core assets while still holding on to their best lowest cost fields?

 

PWE, right?  But who else?

[Cardboard]

BXE comes to mind.

 

There are many others that are cheap or trading well below these transaction metrics in Canada. While they are not separating between core and non-core assets, any transaction would likely be done at higher metrics than the whole.

 

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[Guest wellmont]

there is some fine print there. these assets were not getting any attention. these assets have a lot of potential that enerplus is giving up.

 

Current production from the assets is ranging between 4,500 and 5,000 boepd. Tourmaline plans to grow this production to the 7,500 boepd level in the second half of 2016 with significant further anticipated growth in 2017. The Company estimates it will add approximately 48 mmboe in new 2P reserves in 2016 through this acquisition with the currently-planned 2016 development program. Fully developed, the acquired assets are anticipated to add an estimated 66 mboe to the Company’s 2P reserves over the next two years.

 

the price to 2017 2p reserves is $2.80 which is low.

the purchase price to 2016 second half production is $24,400 boe and even lower on 2017 production.

 

also tou happens to have processing plants and pipeline in this area and can lower operating costs

by almost half. they were the natural buyer for these assets. it also looks like tou bought some gathering assets with the reserves and production.

 

"The production from the assets currently flows to the Hinton-Robb processing plant. Tourmaline plans to redirect this gas to the Company’s three gas plants at Banshee-Edson-Ansell during the first half of 2016 through an existing gathering system associated with the assets. Redirecting the gas will reduce the operating costs of the new assets from approximately $6.25/boe to $3.25/boe."

 

pine cliff made a nat gas acquisition from conoco a couple months back. and the price was rock bottom.

there are a ton of assets for sale in Western Canada right now. Husky just announced they are

selling around $2b of assets.